The U.S. Dollar Index (DX-U2) chart has been one of the most important charts that any trader can follow. As you probably know, the major stock and commodity indexes have traded inverse to the U.S. Dollar Index for the past 10 years. Since July 24, 2012, the U.S. Dollar Index futures have sold off from it’s $84.25 high print for 2012. Today, the U.S. Dollar Index futures are trading lower by 0.59 cents to $81.91 per contract. The falling dollar is once again helping to inflate the markets again.
The U.S. Dollar is still the world’s reserve currency. Most every commodity around the world is traded in U.S. Dollars at this time. This tells us that if the U.S. Dollar is devalued by the central bankers then inflation will be created. This type of action causes prices in food and energy to inflate and trade higher when the dollar becomes devalued.
Some leading equities that will generally trade higher when the U.S. Dollar Index declines include the CurrencyShares Euro Trust (NYSEARCA:FXE), iPath Dow Jones UBS Copper Total Return Sub-Index ETN (NYSEARCA:JJC), United States Gasoline Fund, LP (NYSEARCA:UGA), ProShares Ultra Silver (ETF) (NYSEARCA:AGQ), and the Deutsche Bank AG DB Gold Double Long ETN (NYSEARCA:DGP). Please remember, if the U.S. Dollar Index catches a bid higher all of these equities will come under selling pressure. The U.S. Dollar Index futures (DX-U2) should have some near term chart support around the $81.62, and $81.00 levels.