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The Dollar Waits For News From Europe And The Fed


  • A new high and a rest.
  • Brexit could move the dollar on December 11.
  • The Fed will send a signal to the currency market on December 19.
  • U.S. domestic politics could provide surprises that would impact the greenback.
  • UUP does an excellent job tracking the dollar index.
  • Looking for more? I update all of my investing ideas and strategies to members of Hecht Commodity Report. Get started today »

We have seen wild action in many markets over recent days and weeks. The price of crude oil dropped from a high of $76.90 per barrel on the nearby NYMEX futures contract on October 3 to under $50 at the end of November. The stock market that experienced increased price variance during the typically volatile month of October has continued to swing higher and lower throughout November and into December. Markets reflect the economic and political landscape around the world, and these days there is no shortage of issues that are keeping traders and investors on their toes.

The international currency markets tend to be the least volatile asset class because central banks, monetary authorities, governments, and supranational institutions tend to manage the foreign exchange market in the interest of stability. Stable currencies are imperative when it comes to international trade and managing global and domestic economies. The dollar and the euro are the reserve currencies of the world which means that most central banks around the globe hold the legal tender as reserves. It also means that it is in the best interest of all nations that the dollar and euro experience as little volatility as possible. While they change value against each other and other foreign exchange instruments over time, a slow rate of change is always preferable as it allows business and the official sector to adjust to trends.

The euro currency makes up 57% of the U.S. dollar index. Therefore, it tends to reflect changes in the dollar-euro exchange relationship. The index hit a low at 88.15 in February 2018, and since then it has been trending higher making higher lows and higher highs in a slow and steady rally. In mid-November, the dollar index rose to its latest peak at 97.53 in the December futures contract. The Invesco DB US Dollar Bullish ETF product (

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This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

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