US Dollar Fails To Rally On Portugal And Greece DowngradesMarch 30 | Posted by Kevin Monaghan | Captivating Currencies, Top Story
Credit agencies have recently downgraded Portugal and Greece, and one would expect that this news would send the EURO torpedoing downward vs. the US Dollar… but, it hasn’t! One main reason is that investors are still betting that the ECB will raise its key policy interest rate on April 7th. Coupled with news from the United States that the housing market continues to suffer, interest rate hikes are no where in site, and inflationary pressures still being ignored, investors have held off from letting go of the Euro this early in the game.
Investors such as legendary Jim Rogers is saying that the dollar should be rebounding here, and he has even gone as far as opening long positions in the USD. However, recent trading activity along with the above listed events has forced him to consider closing out the trade as the USD is apparently weaker than expected.
Gold has been an alternative currency play for a while now, however it has recently settled into a sideways trading range as investors are now waiting for a desperately needed signal indicating which direction it will head next. Gold failed to push higher recently, and traders are still wondering if there is enough “umph” for Gold to move above $1450 an ounce. We are still bullish on the “king of precious metals” here at Elite Inside Trader as the fundamentals behind its recent rally are still intact. Keep in mind that February and March are historically quiet months for Gold.
Disclosure: Author, Kevin D. Monaghan, Senior Partner at Elite Investment Group has no position in anything mentioned in this article