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November 25, 2020 | All Eyes on the Greenback

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

After falling 7% since March 2020, the US dollar index has helped fuel a dramatic recovery in risk markets and push speculative sentiment back to record highs.

As shown in my partner Cory Venable’s weekly chart below since 1996, $92 is now testing the dollar’s long term support.

A bounce in this area is likely to offer the next sobriety test for stock and commodity prices.  A definitive close below $92 could re-test the $87 level–where the dollar topped in 2009– and bring further gas for the risk rally.

Stocks are so far beyond economic reality and positive investment metrics at this point, everything is now reduced to a trade. Risk-on or risk-off into year-end?  All eye’s on the greenback!  Treasury yields today are betting on a dollar bounce.  We shall see.

 

 

 

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November 25th, 2020

Posted In: Juggling Dynamite

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