Dollar Dilemma

April 2007 | Market Alert

Despite the resilience of the US economy in the face of ongoing housing sector risks, as highlighted by the unemployment rate dropping to 4.4%, the dollar is currently trading near what we consider to be extremely important levels. Looking at the long-term dollar index chart, it is clear that the 80.00 area represents major support, with the trendline stretching back some 15 years. The second chart highlights the weakness of the dollar against the euro, with 15-year support coming in around the US$1.3500/EUR mark. From a technical perspective, such levels represent a strong dollar buying opportunity, unless, of course, the

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