The US dollar continues its decline against other currencies. Two major factors appears to be responsible for this:
- The ever increasing amount of debt the US seeks to borrow from lending countries
- The current calm before the coming financial storm that pushes investors into foreign currencies that are perceived to be riskier and offer higher returns.
The current point of interest is the dollar below both the 200 EMA and the 50 day EMA.
Will we see a drop to 74 or less as we saw from March to August 2008 as part of a long term downtrend?
Will a crisis this September or October trigger a move back to US dollars as a perceived safe haven and then see the dollar drop in the months that follow?
At what point will the government spending and borrowing force large scale monetization triggering downward dollar movement?
With the price of gold bullion holding up so well this summer, perhaps a strategy to place our savings into a tangible asset would be wise.