Whilst equities continued to climb, the USD saw some chop, settling +0.3% @ DXY 94.95, but that was considerably below the morning high of 95.63. The near term trend remains bearish, with the 92/90 zone on track into early July. The 120s remain a grander target into 2016.
USD, daily2
USD, monthly3
Summary
I remain of the view that the USD will be a very important variable in the months... and years ahead. This should especially be the case in terms of the precious metals, oil, and to a lesser extent, equities.
Eventually, the USD looks set to take out the March high of 100.71.. and then proceed on a hyper ramp to the 120s. A move from the low 90s to the 120s would indeed be a rather severe move, but then... so was the move from the 77s (May 2014) to the giant 100 threshold.
Regardless of the ongoing 'Greek issue', the Euro looks set to weaken all the way into late 2016. Parity against the USD certainly won't be a key long term floor. The 0.80s look a relatively easy target, given a year or two.
King of FIAT land
Rather than the traditional 'dollar doomer' viewpoint that we'll all be shopping at the local grocery store with Gold or Silver coins, I am of the opinion that the US Dollar will remain King of FIAT land for some years to come. This seems a rather obvious outcome, as the ECB and BoJ are printing their currencies into semi-oblivion*.
The USD is of course just one variable that will have an effect on the US capital markets, but to me, its at least one of the top three!
*yes, I realise the amount of paper/digital currency in existence is a small fraction of overall wealth, but still, QE is a hugely important issue.
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Looking ahead
Friday will see PPI and consumer sentiment data.
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Goodnight from London
