I thought this was amusing: Dollar Bears Go Into Hibernation as QE2 Attacks Prove Unfounded.
The article is about the dollar gaining strength recently. From about 6/7 to 11/3, the dollar was generally falling, probably as QE was getting priced in (see here) before the official announcement on 11/3. As you can see from the dollar index chart below, from 11/4 to 11/15, the dollar has been gaining as the dollar was getting oversold and problems in Ireland were resurfacing. From 11/16 – 11/19, the dollar has been weakening again, perhaps some of which can be explained by a recently restrengthening Euro since Ireland is getting bailed out (this will only delay problems into the future). Note that the Euro makes up 57.6% of the dollar index (see dollar index).
I know this article is posted in the “Investing” category, but I don’t have any ideas for trades. I wish I had some investment advice for myself! However, it’s always fun to make predictions/guesses and see what happens. By the way, I’ve never traded FX. It looks extremely volatile, and trading with leverage looks even more dangerous. A lot of this volatility stems from risks with PIIGS (sending the Euro down) and the structural issues that are not changing in the States (sending the dollar down). So, comparing the dollar and the Euro has become a task of deciding which is less worse, which is a hard task! Oh, the reason I look at the state of the dollar is because it’s strongly inversely correlated with stock prices. So, if you know where the dollar is going, you know where stocks are probably going and vice versa.