MarketThoughts.com Believes the U.S. Dollar Index is Making a Significant Bottom

Houston, TX (PRWEB) December 7, 2006

The bear market in the U.S. Dollar Index that began in early 2002 is most likely coming to an end. According to Henry To, Editor of MarketThoughts.com: “The year 2002 began with a perfect opportunity to go short the U.S. Dollar Index – given that the Federal Reserve was aggressively cutting short-term rates, a hugely decelerating U.S. economy, an ever-rising budget deficit as a percentage of GDP, and the signing of the Patriot Act in October 2001 – which made many Middle Eastern investors weary of investing in the United States. In retrospect, that was the perfect storm for the U.S. Dollar and the perfect shorting opportunity, a trend further compounded by the beginning of the U.S. Dollar carry trade that occurred later that year.”

However, many of these bearish factors for the U.S. Dollar are now fading or have faded away. We first discussed the possibility of a surprised year-end rally in the U.S. Dollar Index in our November 12, 2006 commentary, with further arguments and backup in our November 23, 2006 and our November 30, 2006 commentaries. In those commentaries, we cited many reasons for the U.S. Dollar Index to bottom out and to mount a surprise year-end rally, with the possibility of a further upside rally in 2007.

Among them are:

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