USD rallies are still selling opportunities
I’m staying out of the market until after the debt deal is announced tomorrow but I cannot see any reason to be anything other than very bearish for the USD. I’m presuming that some sort of debt-deal will be announced tomorrow, probably to tide them over for the next 6/9 months, and we may well see a spike in the USD immediately afterwards. Any spikes are selling opportunities in my eyes, as the underlying problems will not go away. The US has more debt than it can ever repay and the only way it can grow at the moment is by creating more debt. Capital is starting to avoid US markets, and once this trend becomes ingrained then the slope for the USD will be steep and slippery.
Then there’s always the small possibility that we get no agreement and the US starts to default on its debt, loses on its investment rating etc etc. Who knows where that might end.
I’ve picked my side and I’m staying in the sell-USD-rally camp but I’ll stay well away until the dust has settled.