I thought today's reversal in the Dollar's prospects made this quote from Jack Crooks at Black Swan Capital particularly poignant, timely, and accurate:
Since the dumping of the gold standard, fiat currencies have been given about as much respect as a red‐headed step child. Since then, as many have pointed out, currency investing is like judging an ugly contest. Find the least ugly and buy it; find the most ugly and sell it.When I trade currencies, as I did today, this is precisely the attitude that I take. Which is the least ugly? Today, the Dollar was more ugly than all the others. Who knows what tomorrow will bring?
Much of the dollar’s recent rally has stemmed from the idea that other countries’ economies and currencies are getting uglier while the US economy and dollar is remaining the same amount of ugly. This shift towards ugliness is sparking a shift in capital into the United States and the US dollar.
Jack Crooks is the head market strategist at Black Swan Capital, a currency trading consultant firm. I have been a subscriber to his daily currency trading newsletter for years.
