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I saw a significant degree of real and psychological capitulation this week in favor of the dollar. Risk continues to drive the buck's value higher (money is coming back to the center to hide, as you can see in the bond prices and soaring labor yield). Also, global growth is screeching to a halt (we see that in the big cut out of Australia), and emerging markets most everywhere are getting crushed.
But if we had to pick a "looking in the other direction" favorite, I guess it's the good old Swissie.
With the Eurozone breaking down in a big way, Switzerland - though not setting the world on fire and still smarting from the reality that Swiss bankers don't seem to be able to control risk any better than anyone else - seems as though it might garner some money flow from the 'zone and Central Europe.
Swissie Trade Points to Profit with a Glowing Exit Sign
It appears the selling pressure is waning, evidenced by the decline in selling volume in the Swiss futures listed on the CME...
Perhaps a higher dollar and Swissie are two of the few positive developments rising out of this economic mess.
JACK CROOKS, Currency Analyst
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