Australian Dollar

Simple near-term outlook.

I have told you the US dollar was going up for months.  Some mocked me.  Others insulted me.  So what?  I tell you the dollar's bull market remains intact.  

Curency wars are zero-sum.  Interest rate race is not. 

Laugh if you want to.  Cry if you want to, but the bull market for the US dollar has legs and life. 

Simple cogent analysis of the price action in the capital markets.  Take it or leave it.  

Data and market positioning can explain movement in the currencies.  It does not prove that there is no manipulation or a great conspiracy.  It just means the markets are understandable without resorting to such explanations.    Try it.  

Cry if you want to, but the dollar is stronger.  Deny it if you want to, but the US economy is more vibrant now than the Europe or Japan.   This is what is shaping the investment climate, if you are interested. 

You only get these kinds of moves when the STUFF IS HITTING THE FAN. And this mess has only just begun.

You might not like it.  You may think it is a joke.  Yet the fact of the matter is the dollar is posied for further appreciation.   Be prepared.  

The US dollar closed higher against all the major currencies during the holiday shortened week. The lack of liquidity may have exaggerated the weakness of Swedish krona and Norwegian krone, the poorest performing major currencies.  Both lost about 1.5% against the greenback. 

The least weak currencies were in the dollar-bloc. The Canadian and New Zealand dollars were practically flat, and the Australian dollar slipped 0.2%.   The euro and sterling slipped about 0.5%, while the yen shed 0.7% of its recent gains. 

All of this is political theater. The big story for the markets is not interest rates. It is the US Dollar.

• Christmas rally enters sixth day in Europe (Reuters)
• Downing North Korea's Internet not much of a scalp (Reuters)
• North Korean Internet Access Restored After Hours-Long Outage (BBG)
• At U.N. council, U.S. calls life in North Korea 'living nightmare' (Reuters)
• Ukraine Cuts Gold Reserve to Nine-Year Low as Russia Buys (BBG)
• De Blasio Seeks to Heal Rifts With Police After Officers Slain (BBG)
• Oil steady around $60 on hopes of strong U.S. data (Reuters) - so it fell below $60 because...
• Australian Dollar Hits Four and a Half Year Low on Chine Growth Worries (Reuters)

• Police officers' slaying raises pressure on New York mayor (Reuters)
• People Call for Cooling of Racial Tensions After Murder of NYPD Officers (BBG)
• The $6.3 Trillion Frenzy That Vanquished Treasury Bears (BBG)
• China Investigates Possible Stock-Price Manipulation (WSJ)
• Citigroup Was Wary of Metals-Backed Loans (WSJ)
• UPS Turns Parking Lots Into Sorting Centers to Add Speed (BBG)
• U.S. Move to Normalize Cuba Ties Boosts Firms’ Asset Claims (WSJ)
• Meredith Whitney’s Fund Said to Drop 11% as Office Put on Market (BBG)
• Railcar Bottleneck Looms for Oil (WSJ)

When the dollar falls, we are told it is logical.  The empire is crashing and burning.  When the dollar rises, the markets, we are told are manipulated.    Well, the dollar is back, and the technical correction ended, near we told you it would.  

The financial media is euphoric because stocks are rallying. But stocks are ALWAYS the last to “GET IT.” The currency markets (which trade $5 trillion per day) realize that something MASSIVE is underway. And it’s only just beginning.