2-5 day bounce expected, a rally would shock
Oil now has a big & growing market outside of the US and those countries all have excess dollar reserves to pay with. And as the oil producing countries are paid in dollars they are looking at their own expanding reserves of dollars. Oil is forcing issues with the dollar and interest rates paid on the dollar reserves (or actual loss as dollar falls). This is coming at time when AG knows the economy can't afford a hard hit, lest we see the scenario from Peter Eavis:
"And past experience shows that it will only take a small rise in interest rates from their historic lows to trigger the crunch. In other words, watch loan growth shrink -- and house prices start dropping -- soon after the Fed starts to increase its federal funds target rate. Economists expect a hike in the federal funds rate as early as the June 29-30 meeting of the Fed's monetary policy-setting committee"
(Slippery slope syndrome)may be why funds are raising cash that they will be in no hurry to redeploy.
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