In the media today everyone is talking about the huge broad based rally in the stock market. However, there is very little talk if any about the declining U.S. Dollar Index. Does anyone care that the U.S. Dollar Index is making new three month low? The next major support area for the U.S. Dollar Index is around it’s November 2010 low which is $75.60.
Many retirees who are on fixed incomes just took another hit in their purchasing power. U.S. Consumer spending accounts for 70.0 percent of the gross domestic product in the United States. If the retirees are forced to cut back in their spending this should have a negative effect on GDP going forward. However, at this time all that matters for a stock market rally to occur is the weak U.S. Dollar Index. Look at the chart below and you can easily see this for yourself.