Is The U.S. Dollar Topping? by Angelo Airaghi [Guest Analyst] 6/28/2010

Global activity is expanding, supported by costs and the fiscal stimulus still present in the worldwide economies. However, markets have yet to regain past confidence, although bad news might be discounted in current prices. The U.S. dollar appears to be topping at current levels. If confirmed, it should drag some commodities such as crude oil to higher levels.

The G8/G20 was an opportunity to promote a more sustainable growth. It ended this week-end in Toronto with some promises and few initiatives. Global activity is expanding, supported by costs and the fiscal stimulus still present in the worldwide economies. However, markets have yet to regain past confidence, although bad news might be discounted in current prices. In reality, rates should remain accommodative in the near future as well. The third estimate of the first quarter Gross Domestic Product (GDP) reported a 2.7% annualized gains, below the expected 3.0%. Spending and services were revised down, but the former stays strong for the second consecutive quarter and should support the economy in the coming months. The economy should remain on the upside overall with consumer spending and inventory restocking supporting growth. The Richmond Fed Index declined for the second consecutive month in May. It stays nonetheless near the top levels. In addition, manufacturing has softened lately, but it is still on the expansionary mode. The housing market continues to move laterally in the United States, as the first-time home buyer¡¯s tax credit has expired. Existing home sales declined 2.2% month-on-month in May, due to the volatile condo sales, which slipped 6.8%. Single-family homes moved down only 1.6%. However, the resale business stays strong, but more declines are expected ahead.


Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

This article contains the following sections:

G8/G20

Europe: England to set the example

USD: dollar topping?

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