The unemployment data shows US economy is still resilient – dollar bears are now caught between two hard rocks
Sam Adelton
Oct. 5, 2007

The US dollar is poised to rally sharply. The reason is simple. The gloom and doom takes time to happen. The employment data shows that US economy is resilient and has a long way to go before a recession can be called.

The thin ice syndrome is there no doubt and what happened to US dollar is typical before a fantastic bull market. In Bloomberg Radio, an analysts said something interesting –‘nothing good is left for US Dollar.’ And we counted – no analysts we could find who are bullish on US Dollar.

That is exactly what you like to see before a massive rally.

The US unemployment data points to an interesting thing. The infrastructure is such that new hires are required. Government hired heavily. These are not seasonal. They are jobs that are required. That brings in a question – is wage inflation coming back?

May be that is why dollar is showing technical signs of long term bottoming. If wage inflation is here and the economy does not tank, there will be no rate cut. Instead, perhaps we are looking at a surprise – a rate hike! Now you know why you should not short US Dollar!

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The US dollar is poised to rally sharply. The reason is simple. The gloom and doom takes time to happen. The employment data shows that US economy is resilient and has a long way to go before a recession can be called.
READ MORE>>

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