Washington Supports U.S. Dollar Before Breaking Into New Lows
Treasury Secretary Timothy Geithner is trying to give support to the currency as tensions have grown on a devalued dollar. This past week he stressed the importance of a sound currency. The US definitely wants to devalue the dollar in a slow and steady way. The plunge in the US dollar, which is still the world’s reserve currency, created a lot of international tension and speculation into gold and silver. The Fed wants to slowly devalue the dollar, not create a panic. If it’s collapsing too far, too fast then the Fed or Geithner will come in and make comments to support the dollar. The November election and next week’s Fed meeting could make a significant impact on the bullish dollar trade. I believe the fiscally conservative candidates will gain a lot of support. This could have a bullish impact on the dollar as an expectation of less spending and printing will provide some support for the dollar.