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US Dollar Index Review Jun 11

Good day forex trading koalas.

Welcome to another review on the US Dollar Index. This is a basic yet critical index that is often overlooked by many.

We last visited this index on Feb 11 and conditions then was apparently positive. Unemployment was falling and various economic indicators were improving.


Source : Bloomberg

Looking at the US Dollar Index chart above, we note that the region around 75 – 76 had turned from a support to a resistance line.

The economic growth of the US is showing signs of a slow down. As economic indicators start to show weakness, the unemployment rate had stalled and is now on the rise again. The second round of the quantitative easing policy is nearing it’s end and investors are apprehensive regarding the potential consequences.

Across the ocean in the Euro Zone, the budget deficit crisis continues to threaten the world with a possibility of a new global financial crisis. Greece is undergoing a tough time and is facing the risk of a default.

Risk aversion may be creeping back into the financial systems of the world.

On 17 Feb 11, the US debt is at 14,123,589,307,190.53.

As of 23 June 11, the total public debt is 14,344,503,407,708.93

The US debt has increased.

Many economic experts believe that much must be done to curb this debt otherwise this may bring the US economy to it’s knees in time to come. There were recent talks on a possible downgrade of the US by rating companies and this suggests that the condition is getting critical.

Trade Safely.

***

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