Am I the only one seeing this? While the Euro has been gaining on the US currency for some days now, it would seem that the bearish stock markets have helped the dollar to move to its support. The Dow Jones Industrial Average fell sharply today, and it is the index which is most likely to influence the dollar. Since the mid-1990s, the index has shown a strong positive correlation with the greenback as foreign investors purchased US equities. Three major forces affect the Dow: 1) Corporate earnings, forecast and actual; 2) Interest rate expectations; and 3) Global considerations. Consequently, these factors channel their way through the dollar. Looking at the chart a support line break would seem likely as stock markets go down. Tomorrow will be an exciting day because a break will trigger a lot of stops.
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