Expanding on my last post I would remind bears that the dollar is measured against a basket of currencies. As the global recession wears on other countries are going to be tempted to devalue their currencies to prop up faltering economies.
The dollar is still the world’s reserve currency. In a time of competitive currency devaluation I suspect there will continue to be a flight to what is perceived as the safest global currencies. Namely the dollar and the Yen.
As of today the dollar is on the verge of completing a 1-2-3 reversal. A move back above the 200 week moving average at 83 would confirm the dollar is still in a bull market and deflation is still in the drivers seat.
I’m starting to wonder if the dollar is going to be at the mercy of who has the fastest fingers on the computer. Which ever countries can create money the quickest will ultimately win the coming devaluation wars.