The Debacle That Is The Dollar

The Federal Reserve released their FOMC Policy Statement yesterday and for the first time ever, Ben Bernanke held a conference call. To show the lack of faith in him and the Federal Reserve, the Dollar crumbled. Investors ran into gold and silver in record numbers. Today, the Dollar is falling again with the PowerShares DB US Dollar Index Bullish (NYSE:UUP) trading at $20.97, -0.05 (-0.24%). In response to the weaker Dollar, the SPDR S&P 500 ETF (NYSE:SPY) is trading at $135.86, +0.19 (+0.14%). Always remember, the markets go the opposite way of the Dollar. Yesterday, the Dollar fell on the Federal Reserve’s comments and the markets surged. Today the Dollar is slightly weaker and the markets are slightly stronger.

Silver and Gold continue to surge higher. The iShares Silver Trust (NYSE:SLV) is trading at $47.26, +0.26 (+0.55%) and the SPDR Gold Trust (NYSE:GLD) is trading at $149.36, +0.16 (+0.11%).

This morning economic reports were somewhat poor as Jobless Claims were reported at 429,000. A month ago, Jobless Claims were hovering in the 380,000 range and were at multi-year lows. Since then, they have steadily crept higher. In addition to a poor jobless claims number, GDP came in at 1.8%. While somewhat in line with expectations, this number is concerning. The reason for concern focuses on the massive amount of money the Federal Reserve is pushing into the markets through QE2. With the massive stimulus, the growth should be higher. These economic numbers are definitely concerning but have little effect on the markets as long as the U.S. Dollar falls.

Gareth Soloway

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