Posted by Davy on March 14th, 2008 in Market Commentary
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I don’t know much about technical analysis, charts, heads & shoulders, double bottoms, etc. but this chart looks fugly:

It was just last August that folks were worried about the US$ index dropping below 80 with no floor in sight. Six months later and here’s 70 rushing up to meet our beleaguered currency.

I don’t have much of a clue as to which direction the dollar will head next in the short term. I remember some pundits from Brown Brothers Harriman and other shops suggesting that the short bet against the dollar was way too overcrowded and would lead to a rebound. That was around $1.47 to the euro. I suspect they may be closer to being right today than back then but who knows?

We are also getting closer to the point where central banks may intervene in the currency markets. Here’s an article from Bloomberg showing that I’m not the only one with intervention on my mind:

Dollar’s Slump Puts Morgan, Goldman on `Intervention Watch’ March …