US Dollar and US Stocks, 12-13-2009
December 14th, 2009
The big story could be if the US Dollar increases and stocks did not go down, which is extremely unlikely Friday’s pattern continues.
In simple terms, the low interest rates have encouraged investors, mutual and hedge fund managers to borrow dollars and invest them in riskier assets such as stocks, which can provide higher yields. If the US Dollar strengthens (moves up in price), these investors will be forced to sell stocks and then buy Dollars. Because these are leveraged positions, it wouldn’t take much for an avalanche of selling in stocks to begin.
Well, it’s amazing. The miracle has been done. Hat’s off. Well done, as we know that “hard work always pays off”, after a long struggle with sincere effort it’s done.
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mgibs
Stock Reports
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Matt