Last week, we put out a piece explaining that foreign exchange traders see the US dollar as being strong and that American consumers are experiencing higher prices (meaning a weaker dollar). Today, the Wall Street Journal published a piece titled “Surging Dollar Raises Possibility of Parity With Euro” explaining that the dollar is strengthening against the Euro.
Yesterday, the same paper published a piece titled “Gas Prices Hit New Highs Again With All 50 States Above $4 a Gallon“.
This is exactly our point. You might be able to use a dollar to buy more euros, but that same dollar will buy you less gas, food, and housing. Is the dollar strengthening or weakening? That depends on your point of view, but we’d rather have food and fuel than euros.