The panicky nature of yesterday’s markets has disipated. We’re left with a mixed bag today. US equities are bouncing nicely from the base of its consolidation, a bullish sign. A weak dollar can be good for US-based companies as they get more dollars when they repatriate their overseas earnings. It also helps the export sector, all else being equal.
Commodities are mixed. Oil has shed early gains and trades now at $61.20. Copper is recouping yesterday’s losses while gold gives back some of its earlier gains to $960.
The key relationship near-term is long-term US interest rates. If confidence in the US remains weak, rates will rise and the dollar will stay weak.
