A Currency Conundrum: Beware of the U.S. Dollar’s “Head Fake” Rally

Don’t mistake the U.S. dollar’s recent rally for strength. If anything, it’s a head fake of legendary proportions. In fact, the dollar’s recent run-up is actually a warning that risks are escalating. To better understand what I mean here, let’s look at the greenback’s recent performance against the euro. After bottoming at an all-time low of $1.6019 versus the euro on April 22, the dollar has soared nearly 4% and was trading at $1.5428 per euro early yesterday (Wednesday). Now many of the Wall Street types expect that rally to continue. Just yesterday, UBS AG (UBS) predicted the greenback would rise to $1.47… SHARETHIS.addEntry({ title: "A Currency Conundrum: Beware of the U.S. Dollar’s “Head Fake” Rally", url: "http://jutiagroup.com/2008/05/08/a-currency-conundrum-beware-of-the-us-dollar%e2%80%99s-%e2%80%9chead-fake%e2%80%9d-rally/" });
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