U.S. Dollar Index Starts Lower = Higher Market
This morning the U.S. Dollar Index has started the day sharply lower. The U.S. Dollar Index is trading lower by 0.46 cents this morning to $78.36. The U.S. Dollar Index is now on a 10 day losing streak and has now declined by nearly 3.00 points since its January 10, 2011 high. A 3.00 point decline in the dollar is a lot of meat and potatoes in the currency world.
It is important to note that in the past a lower U.S Dollar would have boosted most precious metals and commodities. These days the precious metals have all turned down as the Asian growth countries are now being forced to raise interest rates to fight and counter the high inflation that the Asian countries are now facing. China, India, Thailand, Brazil, and Vietnam are just some of the countries facing major inflation. Food riots have recently broke out in various countries around the world due to high food inflation. It is important to remember that hard and soft commodities are traded in U.S. Dollars and the weak U.S. Dollar Index is certainly the leading cause of this inflation.
If the weak U.S. Dollar Index begins to fail to inflate the stock markets higher there could be problems in the markets down the road. The entire stock market rally since March 2009 has been on the back of a weak U.S. Dollar Index.