U.S. Dollar Most Overbought Since 2010
Tommy Humphreys | Sep 16, 2014 12:02AM ET
With the ECB shifting to an über-dovish stance, and the possibility of the Fed hiking rates sooner than expected, the US dollar has suddenly become the most favored currency on the planet:
In fact, the last time the USD was as overbought as it is now was June 2010 when fears of a Greek exit from the euro triggering a eurozone meltdown were palpable (58% of the US Dollar Index is comprised of the euro currency). While a dollar pullback is to be expected over the near term after the recent parabolic move, an eventual move back up to the 2008/2010 highs is in the cards before year end.
Any further upside in the USD is likely to remain a headwind for precious metals and mining shares while favoring European exporters who will benefit from a weaker euro.
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