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08/02/05 1:19 PM

#667 RE: AnderL #663

USD, always a close eye

The only problem i have with it re-testing bottom that late is I expect the USD and equities to move together again.
That's how this 3rd equity leg kicked off and should be how it finishes..with the usd continuing to rise through the start of equity bear market leg 2

Now stocks, mainly techs are breaking higher. It'll be interesting to see if the usd will accompany again at some point during this year

85 does look like a good short term usd target but i'm thinking we'll get there quick.
If it doesn't go back to that 85 and just starts rising, it could further confirm the overall weakness of this USD bounce

A strong usd to mid 06-07 fits into my models, in relation to $gold anyways

Another point though. The usd index is to a basket of currencies, and isn't the euro the biggest weight in that basket?
I don't see the dollar having much more downside as far as the euro is concerned. I think the last 3 years took care of that
I'm more seing weakness against the asain currencies, and gold(again) to a greater extent
And I expect asians to sell dollars into this upcoming strength

One thing is for sure..there is at least one currency crisis coming in the relative short term
When cnbc pumps forex as the next daytraders haven, you know something big and bad is about to happen