Written by Tony Muratore
With every hedge fund profiting huge from oil and precious metals over the past year, the next big play might just be the U.S. Dollar. Why has the dollar been crushed you ask? The Government continues to print massive amounts of money to line the pockets of big businesses that are too big to fail, with no regard to a national debt of over 11 trillion.
The major US debt-holders around the world like China have decided to shift their central bank reserves to other currencies and commodities thus driving up gold and weakening the dollar. But fear not, with the greatest economy in the world, I have confidence that the U.S. Dollar will return to full strength in the long run.
If you think the US dollar has hit a bottom, then going long on the PowerShares DB US Dollar Index Bullish (NYSE:UUP) is your play. If you think the US dollar has lower to go than play the PowerShares DB US Dollar Index Bearish (NYSE:UDN).
Most analysts have mixed thoughts on where the dollar will go in 2010 but let’s face it how low can it go from here? At some point, and I’m not saying short term, the Fed will have to raise rates and that will only strengthen the Dollar further.
I like the play on the U.S. Dollar here because while everyone is bashing it the contrarian trader should look at it as a buying opportunity. Either way, do your due diligence and happy trading.
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