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The US Dollar Index (USDX) has been bouncing back by more than 12% since the bottom posted in mid-July. Actually this low level was the second leg of a “double-bottom” pattern which is a strong basis for a rebound. This is what happened and now the Dollar Index has retraced 61.8% of the bearish trend started in October 2006 and ended then at mid-July 2008.
This bearish trend (between points A and C on the chart) drove the Dollar Index from 87.14 to 72.5.
As you can plainly see, some commodity bulls are back-peddling this year. We know from our hedge fund experience that the falling US dollar played a big part in rising commodity prices.
Which isn’t to say that real commodity demand doesn’t mean anything. But if you plan to have anything to do with cheap resource stocks, you need to consider the US dollar’s direction. Today we’ll do it for you. Here’s the Euro/Dollar Chart.
| All Ords | 3513.10 | |
| ASX200 | 3523.20 | |
| NZX50 | 2714.59 | |
| DJIA | 8265.29 | |
| NASDAQ | 1474.87 | |
| S&P 500 | 847.33 | |
| Ftse 100 | 4122.60 |
| Name | Previous Day's Close | % Change |
| All Ordinaries | 3639.50 | - 2.38 |
| S&P/ASX 200 | 3653.00 | - 2.60 |
| Aus Dollar | 64.93 | 0.35 |
| Name | Yesterday's Close | % Change |
| DJIA | 8273.58 | - 2.70 |
| FTSE 100 | 4132.16 | - 2.44 |
| Nikkei 225 | 8522.58 | 0.71 |
| Shanghai | 2030.48 | 2.17 |
| CSI 300 | 1987.22 | 2.19 |
| Gold | 737.09 | - 0.73 |
| Crude Oil (BRENT FUTR) | 55.00 | - 3.71 |
| Symbol | Name | Price | % |
| CCL | Coca-Cola Amatil.. | 9.31 | +12.84% |
| MCW | Macquarie Countr.. | 0.40 | +8.1% |
| ERA | Energy Resources.. | 16.90 | +6.96% |
| BXB | Brambles | 7.99 | +5.27% |
| GMG | Goodman Group | 1.14 | +5.06% |
| Symbol | Name | Price | % |
| AIO | Asciano Group | 1.28 | -17.1% |
| KCN | Kingsgate Consol.. | 2.86 | -15.39% |
| MMG | Macquarie Media .. | 0.92 | -14.82% |
| BNB | Babcock & Brown | 0.41 | -14.59% |
| BBI | Babcock & Brown.. | 0.06 |
-13.44%
|
| Coca-Cola Amatil | CCL |
| Adelaide Brighton | ABC |
| Austin Engineer | ANG |
| Babcock & Brown | BNB |
| C'wlth Bank of Aust | CBA |
| Hutchison | HTA |
| Minara Res | MRE |
| Mount Gibson Iron | MGX |
| National Aust Bank | NAB |
| Date | Release |
| Nov 18 | Aus RBA Board Minutes (Nov) |
| Nov 18 | US Producer Price Index (Oct) |
| Nov 19 | Aus New Motor Vehicle Sales (Oct) |
| Nov 19 | US Consumer Price Index (Oct) |
| Nov 19 | US Housing Starts (Oct) |
