A falling dollar is driving stocks higher

09/10/2009 11:14 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

The dollar keeps falling. And stocks keep climbing.

The U.S. currency dropped to $1.46092 to the euro on September 10. It hasn’t been this low since December 2008.

And even though it’s down 13% since it peaked in March, the dollar has a way to go before it finds support.

 The U.S. Dollar Index, an index of the dollar against six currencies, closed at 76.81 on September 10. Support, calculates Arthur Hill on StockCharts.com comes into play at 71-74.

The U.S. dollar and U.S. stocks are now clearly locked into a negative correlation. When the dollar falls, that is, stocks climb.

With the dollar headed still lower, stocks look likely to continue to move up.
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