Everybody and their dog seems convinced the USD is going to run off a cliff right now. The weekend’s G20 meeting did little to avert that assertion. Recent ‘the dollar is dead’ claims seem so shrill that, for the fun of it, we’ll stick our contrarian neck out here and say that the USD is about to rally. We’ve annotated the chart above at the point of this assertion, and we promise to update it before the end of the year, whether we are right or wrong in our prediction.
Of course, this all has implications for the immediate direction of the loonie, the stockmarkets, commodities, gold… but we’ll focus this prediction on the USD itself. For the record, this is a short term bet, and we’re not inordinately attached to the USD as an investment vehicle longer term. And everybody should do their own due diligence, naturally.
Below we’ve collected a few sample quotes from today’s news that are bearish the dollar, to contrast with our prediction, and to illustrate how convinced many are that the buck is tanking.
Quotes and headlines from today:
Dollar at Risk of Becoming ‘Toxic Waste’ – CNBC, 25 Oct 2010
‘G20 agreement unlikely to stop U.S. dollar’s downward trend’ – Financial Post, 24 Oct 2010 Excerpt: “This outcome should reinforce downward pressure on the U.S. dollar” – Todd Elmer, head of G-10 currency strategy at Citigroup
“The driving theme for the markets remains a lower U.S. dollar via [quantitative easing] for floating-currency countries and higher current account imbalances for managed-currency countries.” – Andrew Busch, global currency and public policy strategist at BMO Capital Markets, Globe and Mail, 25 Oct 2010