Speculators Bearish as Dollar Tries to Hold Major Support

Jon Politics

FS Insider recently spoke with John Derrick, CFA, President of the Derrick Letter, regarding his outlook on the dollar, the US stock market, and more. Derrick believes there is a good case to be made that we are nearing the end of the dollar’s decline and that the risks of a near-term correction in the US stock market have increased (see Derrick: Retail Investors Buying As Institutions Trim Back for audio).
Dollar Weakness Set to Reverse
The dollar has traded lower over the course of this year, and it’s now approaching an extreme, Derrick noted.
Right after the election, there was a great deal of enthusiasm for President Trump’s agenda. With the expectation of greater economic growth and fiscal stimulus, the dollar rallied strongly as investors anticipated a shift towards tighter Fed policy in response.

This post was published at FinancialSense on 08/07/2017.