My picks: Take Profits on EUR/USD and Stay Flat
Expertise: Global Macro
Average Time Frame of Trades: 1 week
This week the U.S. dollar has been under a heavy selling pressure. Earlier, the U.S. Federal Reserve said it will continue to implement quantitative easing to support the economy and many investors now think the US dollar could fall victim of a new wave of inflation. In fact, the spread between yields on 10-year notes and Inflation Protected Securities reached more than 173 bps on Wednesday and the U.S. dollar may get crushed if the Fed does not manage investor’s inflation expectations. Having said that, trading is also about timing and one should not try to chase the current down trend in the U.S. dollar since we may see a sharp reversal, most likely triggered by profit taking. This is a good time to take profits, stay flat and wait for better entry opportunities.
