Dollar Downer

This is a chart of this past week's action in the U.S. dollar index. A 3.7% decline in one week is very rare and it looks like new lows are ahead of us. The U.S. Treasury market also took it on the chin with long dated Treasury bonds falling and yields rising dramatically. The fact that this is happening while the Fed is buying bonds in the market is very troublesome. The dollar is oversold here and a bounce next week would not be unexpected but the primary trend now is down. Fears in the market that the U.S. will lose it's AAA rating are fueling a run on the dollar. Higher rates in the bond market will trample any "green shoots" of economic recovery (if there really is any). This situation will be the primary topic on Sunday's radio show, tune in live at 11am ET on the internet-Lou