The US dollar has lost 7.5% of its value in less than 3 months and more than 17% in only 8 months.
Quantitative easing works!
Marc Chanler, global head of currency strategy at Brown Brothers Harriman:
“If 74.17 falls, the next big target will be the low made around the time of the Bear Stearns demise which was March ’08, that low was 70.70. I think it is quite possible to see a panic before we go through 70 on the dollar index.
We have dropped nearly 3% in about the last 5 trading days. Euro longs are getting nervous, we see them buying puts to hedge against their long positions.
James Turk out of London:
The key is the dollar index took out its low from last November. The way I see it that means the dollar index is going to be closing in on its all-time low of 70.79.
It’s not just the charts painting this bearish picture for the dollar, the fundamentals are atrocious. With Europe on the verge of raising interest rates and the Federal Reserve set in its ways keeping interest rates low as far as the eye can see, people around the world are going to increasingly dump the dollar.
At some point there is going to be a panic as the flight from the dollar moves from the relatively orderly retreat we are currently witnessing, to a stampede. The charts are telling me that panic is about to begin. As I mentioned in a KWN blog earlier this month, I believe the next leg down in the US dollar will shock the world.”