A very good start to the new quarter yesterday for the US and the US dollar as stocks soared and the currency regained further lost ground. What exactly triggered this strong move is not exactly clear but we side with the view that many hedge funds and investors are taking profits on oil and other commodities and putting their profits into equities as they perceive a bottom to this long lived sell-off.
The betting is that we may have seen the worst of the credit crisis. But now we need US economic news to support this view over the next few days and unless it does we may well see some of the dollar gains of late being given back.
Fed chairman Bernanke is scheduled to testify on the economic outlook later today. The trading model shows one or two T/R's breaking to the USD positive side with the Euro/Usd also closing in. Time for discipline but also be well alert..it may not be over yet!