U.S. Dollar Breaks Its December Lows

Steady decline of the dollar continued to break the long-awaited December lows (see chart below). While I expected the dollar to reach this point, I thought of a strong relief rally would be before coming here. "The dollar is destiny" seemed sealed after Canadian authorities said the resigned acceptance of the strength of their currency against the U.S. dollar. As the dollar continues to roll back the achievements of its former status as safe haven, I still left wondering at what point will America's trading partners are beginning to express concerns about the weak dollar will hurt their own exports. Americans are already saving a lot more, and the strongest propensity to save as imports continue to rise in value (this relation, of course, was very broken in our credit bubble rapidly expanding debt became a convenient way to finance the net increase in consumption of imports). Moreover, economic recovery seems to be all about China, and any company fortunate enough to be doing business there, so it is possible that the finance ministers of China and Russia was not going to worry as much as they could have done .

From a technical standpoint, a great relief to U.S. rally in U.S. dollars next week or so it still seems likely given the multiple synchronous peak in a month that made many currencies against the dollar (eg, the euro, pound, Australian dollar and Canadian dollar). These movements have created probably busy short U.S. dollars.

Finally, I had expected that the breakdown of the December minimum is delivered more than $ 1000/ounce gold and silver in 52-week highs. However, metals are still below the highs of the year, even as other commodities and materials such as copper and steel are rising ever higher (despite growing questions about whether China's livestock commodities can or wants to continue for long). I suspect that the loss component of Fear of gold and silver trade is the suppression of prices a little, but the dollar continues to weaken, these two metals should shine even brighter.