Dollar Tries To Recover Against Odds, Says Dr. Joe Duarte
Duarte added: The U.S. stock market seems to be in rally mode, but the dollar has taken a beating lately. Much of the decline has to do with fundamentals, such as rising U.S. debt and the fact that U.S. interest rates are likely to stay low for some time due to the Fed's aggressive buying of U.S. Treasurys over the next few months.
But Geithner needs to understand that his job is to keep the dollar steady, if not strong, if not by actions then by words. And on Wednesday he noted that he would be open to discuss a global currency with the Chinese, only to clarify his statements throughout the rest of the day.
As one commentator noted, Geithner needs to understand that this is the real deal and not a college lecture somewhere when he speaks about the dollar.
The market, though, is another story. It tells a tick-by-tick tale of what it understands the situation to be. And the dollar, after gaining ground painstakingly over the last few months, has given it all back, and is now trading at levels not seen since September 2008. What's most striking is that much the decline came in one day, when the Fed announced its Treasury bond buyback program.
The fact that the dollar was already wobbly should have given Geithner enough warning to keep his comments at least neutral with regard to the greenback. But, asking Geithner to check his charts before he speaks may be too much to ask, given the fact that he has so much other stuff on his plate. Funny, though, how even though their stars have tarnished over the last few years, in their heyday, Bob Rubin and Alan Greenspan were always supportive, and cautious respectively about their comments on the dollar.
Duarte's conclusion: If the dollar breaks to new lows in the next few weeks, there will likely be more trouble for all the markets.
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Duarte's IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
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