Sunday, February 28, 2010

How to Profit From the Rising Dollar

CPA Chris Wachtel at Seeking Alpha provides a helpful catalogue of the combination of fears and hopes that are driving the dollar higher. Importantly, he notes, the dollar's strength results form its 'relative' stronger position among a host of weak currencies, including the dollar.

Wachtel is the chief analyst for AVAFX, a leading online trading site for global currency, commodity, and stock index trading, at http://www.avafx.com/

Here's a key quote from his Seeking Alpha post:

The ramifications are chilling. The default of any of the PIIGS could well send borrowing rates for the others beyond affordable rates, effectively setting off a wave of defaults. Remember that the collapse of Lehman Brothers bank alone was enough to crash credit and asset markets in the fall of 2008. Imagine the panic caused by the collapse of Southern Europe.

That alone is enough to explain US dollar strength.

Read more at this link:

http://seekingalpha.com/article/191052-how-to-profit-from-the-rising-dollar?source=hp_wc

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