A tradable bottom in dollar might be near.
The saga of the declining dollar has turned from a drama into a crisis.
We’ve got used to having Chinese officials hinting darkly that they might diversify their foreign exchange reserves out of the US currency, as they did again last week. We can even take it when Bill Gross, the world’s most influential bond investor, tells the public, as he did, also last week, that their investment strategy should consist of not buying anything that has a dollar sign attached to it.
But when Gisele Bündchen, the Brazilian supermodel, trashes your currency by insisting that she wants to be paid in euros, not dollars, it really hurts.
A dumb model indicator at work. When sentiments reach extreme a bounce is on hand. Short dumb models, long dollar.