| |
| |
Technical analyst Chris Kimble posted some interesting charts on his blog today that I've reproduced below. See his commentary on the Dollar here and on commodities here.
The Fed wants to see core inflation rise to a target around 2%. Currently the core CPI and PCE are hovering around 0.8% (discussed here). Conventional wisdom is that a weaker US Dollar is inflationary, in which case the Fed might welcome additional greenback weakness.
As Chris points out, both the Dollar and commodities are at key technical levels. Commodities have been on a tear for the past several months while the Dollar weakened. The Dollar, however, rebounded following the Fed's official announcement of QE2 on November 3rd (a disappointment for Bernanke?) and then remained relatively range bound throughout December.
On Friday of next week the CPI for December will be reported. Will we see evidence that core inflation is heating up? And how will the Dollar and commodities behave at the current technical junctures? These will critical topics over the next few weeks.
|
|
