Dollar Off Lows,Stocks Weaker Before Fed Speakers, Auctions
Investors look hesitant to keep the rally going. The S&P 500 has climbed 5.5% on six straight days of gains and the Dow hit a 13-month yesterday at 10,226, but Tuesday’s future market shows both markets retrenching. Meanwhile, stocks in Asia and Europe are all modestly higher.
Though Tuesday offers no major economic data, there’s plenty going on markets to keep headlines active and investors busy. Just yesterday the US dollar fell to a 15-month low and gold topped the $1,100 mark to hit a new record high.
Even so, analysts from TD Securities suggest the dollar may be overvalued by as much as 20%. “Our model outputs support our call for further, medium term weakness in the USD,” analysts wrote in the TD U.S. Dollar Monitor report. “We expect EUR/USD to reach USD1.55 by mid 2010.”
In unrelated news, HFE’s Ian Shepherdson argues that the $8,000 tax credit for homebuyers, which was extended into March last week, is regressive.
“For the record, the homeowner tax credit is bad economic policy â€
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