Liberating our malaise

It’s hard not to think that the very intense spotlight being shined upon the US dollar makes it a key determinant of market direction in the near term. A weakening US dollar would be expected to result in a reversal of the current pressure on emerging markets, commodities, commodity countries including Australia, and their currencies. Further strength in the US dollar, many believe, will increase pressure on the global financial system, increasing the risk of a financial correction. Listening to the comments of Crispen Odey, who is lauded as one of the UK’s “most brilliant” hedge fund managers, one concludes he believes in this latter scenario. He believes the turmoil that began last month has only just began, that stock markets worldwide are overextended by 30 - 40% and in response he has moved about 29% of the $11.7 billion he manages into cash. On the balance of probabilities, it might be that we will soon see some optimism return to the local stock market amid a weaker US dollar. READ THE FULL ARTICLE (VIEW LINK)