Wednesday, May 12, 2010

Ignore the DXY

For anyone who thinks the "DXY" or dollar/euro or dollar/yen relationship defines whether the dollar is "strong" or "weak", please look at the chart. Basically the dollar has been g0ing more or less nowhere the past few months in the real world in which it is exchanged for the currencies of its trading partners.
Compared to the stock market's gyrations and the 9 year bull market in gold vs. the USD (and all other currencies), the trade-weighted dollar is a rock of stability!
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