The Greenback Finishes Green!
The U.S. Dollar Index (DXH8) finished the day to the upside today, closing at 77.62. Although it is obvious this is not a day to end all days for Dollar bulls, the buck has been making a bit of a statement lately.
There are rumors that the Fed will not lower interest rates again at its next meeting due to rising inflation numbers. Investors have also had more of an appetite for higher-yielding U.S. government bonds – which have also had a nice week to the upside, thank you very much. Combine these factors with the U.S. stock markets having a down week, and it becomes clear why bulls liked the Dollar.
On the chart, the Index is currently above both of our moving averages. This has been a one-week pop. The nearest point of resistance is at the 78 level, and we're close to hitting that right now. Beyond that level, the next resistance area doesn't emerge until after 80.
Recession will be the big question to start 2008, and the answer will play a big part in the fate of the Dollar.
Mike Tosaw, Director of Education
