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Dollar Surges Higher After ADP Report

Jan. 05, 2011 10:00 AM ETFXE
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 This morning the payroll processing company ADP reported that the U.S. economy added 297,00 jobs. Economists had expected the headline number to be just 100,000. This is quite a beat on the headline number and a sign that the economy is improving. Since the stock market low in March 2009 the stock market has been rising on the back of a weaker U.S. Dollar Index as most commodities have inflated higher leading the markets worldwide. Today the U.S. Dollar Index is spiking higher after the ADP report. Can the stock markets actually rise with a stronger U.S. Dollar Index?

This morning the Powershares DB U.S. Dollar Index Bullish(NYSE:UUP) is trading higher by 0.24 cents to $23.12. The Currencyshares Euro Trust(NYSE:FXE) which usually trades opposite the UUP is trading sharply lower this morning by $1.51 to $130.94. In the past 10 years the stock market has only rallied when the U.S. Dollar Index has declined. This decline in the U.S. Dollar Index is exactly what has helped to inflate the markets around the globe. Many traders and investors are wondering if the U.S. Dollar and the stock markets can actually trade higher together over the long term. The dollar and the market could and has happened to trade higher together in the short term, however, in the past ten years it has never happened in the long term. This morning the major stocks market indexes are trading slightly lower at the open.

Nicholas Santiago

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