Fed Blesses Market’s Melt-Up – And Greases Skids for the Dollar
March 16, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Long Investment
Dr. Duru submits:
A catalyst for working off the market’s over-extended and over-bought conditions remains elusive. The Federal Reserve’s latest monetary policy statement essentially blessed the market’s stubborn “melt-up.” The statement did not provide the incremental “hawkishness” as I was expecting given last month’s surprise discount rate hike. In fact, this statement’s reference to low rates for an “extended period” further confirms Chairman Bernanke’s insistence that the Federal Reserve is not tightening monetary policy. This statement must discourage anyone looking for more support for the dollar to re-energize its 3-month relief rally. Now, there is every reason to expect that the dollar has topped out here at the resistance formed by the June highs (see chart below). Moreover, the euro is stabilizing, and S&P removed Greece from “creditwatch” (although the outlook for its rating on Greece remains negative).
The U.S. dollar looks ready to resume its decline
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