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Usd Outlook: Dow Plunges 366 Points
A parade of worse-than-expected earnings numbers from major banks and manufacturers sent Wall Street investors running away from stocks and toward the safety of U.S. government securities. When all was said and done, the Dow had plunged 366 points by the closing bell.
Think of the Dow falling as a big rock that is thrown into the middle of a pond. We've seen the first splash. Now we have to prepare for the ripples that are going to flow through the international marketplace.
What will a falling U.S. stock market, poor corporate performance and falling bond yields do to the USD? Thrash it, of course.
The USD is going to continue to lose value. Fed funds futures are showing investors believe there is a 90% chance the Fed will lower interest rates to 4.50% when they meet next on October 31. That will be quite a Halloween trick for USD bulls and a Halloween treat for USD bears.
If you still fancy yourself a USD bull, take a look at what the USD is up against:
1. The Fed is almost certain to cut rates.
2. U.S. corporations are stumbling as the economy slows.
3. The markets continue to get hit by aftershocks from the sub-prime mess.
4. The U.S. housing market is far, far from hitting its bottom.
5. Foreign countries, especially those in Asia, are selling U.S. government securities.
Think twice before you bet on the USD getting stronger.
Also, be sure to check out our blogs, videos, calendar, podcasts, fundamental analysis, technical analysis, trades, and reports at ProfitingWithForex.com
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