{"id":22291,"date":"2011-07-12T10:02:27","date_gmt":"2011-07-12T14:02:27","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=22291"},"modified":"2011-07-12T10:02:27","modified_gmt":"2011-07-12T14:02:27","slug":"is-the-us-dollars-slump-set-to-end","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/07\/12\/is-the-us-dollars-slump-set-to-end\/","title":{"rendered":"Is the US Dollar\u2019s Slump Set to End?"},"content":{"rendered":"

Is the US Dollar\u2019s Slump Set to End?<\/span><\/strong><\/a><\/p>\n

By Money Morning<\/p>\n

You may have seen the repeated calls for the US Dollar to collapse.\u00a0 But Bloomberg News notes, \u2018The best currency forecasters say the U.S. dollar\u2019s 12% slide will end\u2019<\/em>.<\/p>\n

All but one currency forecaster surveyed by Bloomberg believes this.<\/p>\n

Bloomberg goes on, the \u2018\u2026deepening European debt crisis discourages bets against the world\u2019s reserve currency\u2019<\/em>.<\/p>\n

Have a quick look at the chart below. The past year has been one long slippery-dip ride for the American currency:<\/p>\n

\"\"<\/a><\/strong>
\nSource: TradingEconomics.com<\/em><\/p>\n

 <\/p>\n

This chart is the US Dollar Index (DXY). It measures the performance of the greenback against a basket of currencies.\u00a0 It includes the Euro, Japanese Yen, British Pound Sterling, the Canadian dollar, Swiss Franc, and Swedish Krona.<\/p>\n

As you can see, the Dollar\u2019s slide hasn\u2019t been pretty.<\/p>\n

However, Stephen Gallo, head of market analysis at Schneider in London, shared his bullish forecast for the U.S. dollar.\u00a0 He said, \u2018There\u2019s not a lot of room left for it to weaken beyond the $1.50 to the Euro, and we still see it recovering to about $1.40 by year end\u2019<\/em>.<\/p>\n

One look at the chart below tells you the U.S. dollar has some way to go to reach his forecast:<\/p>\n

\"\"<\/a><\/strong>
\nSource: Yahoo.com.au<\/em><\/p>\n

Last week, the US dollar rallied 1.8% against the Euro. Eurozone problems helped this. As with any quick rally, spectators are quick to point out the \u2018safe haven\u2019 of the greenback.<\/p>\n

Richard Grace, chief currency strategist of international economics at the Commonwealth Bank believes \u2018\u2026the U.S. dollar is bouncing along the bottom\u2019<\/em>.<\/p>\n

And he\u2019s not alone with this view.\u00a0 Of the top five currencies forecasters, only one had a bearish view on the Dollar.\u00a0 Kit Juckles head of foreign exchange research at Societe Generale said:<\/p>\n

\u2018The U.S. favours a weaker currency as part of its economic solution and with employment well below where they want it to be, the Fed will keep rates lower for longer.\u2019<\/em><\/p>\n

He added, \u2018I\u2019m negative the U.S. dollar.\u2019<\/em><\/p>\n

He thinks the dollar will \u2018slide\u2019 to $1.52 per Euro by the end of the year.<\/p>\n

So, if there\u2019s only one negative opinion out of 50 for the U.S. dollar, does that mean the majority of forecasters are right?<\/p>\n

It\u2019s hard to say.\u00a0 The Fed\u2019s monetary policy isn\u2019t doing the greenback any favours.\u00a0 But as long as the U.S. dollar is seen as a haven for investors there will be a demand for it and that could push the U.S. dollar higher.<\/p>\n

But whatever happens, the US Dollar Index will be a key chart to watch over the coming months.<\/p>\n

Shae Smith<\/strong>
\nEditor, Money Morning<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

You may have seen the repeated calls for the US Dollar to collapse. But Bloomberg News notes, \u2018The best currency forecasters say the U.S. dollar\u2019s 12% slide will end\u2019.<\/p>\n

All but one currency forecaster surveyed by Bloomberg believes this.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-22291","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=22291"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22291\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=22291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=22291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=22291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}