Dollar index could rally in near-term: Commodity Broking

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS See further run for gold, may touch $1500/oz: Macquarie Sec

 

Q: Can you tell us more about the dollar index-you spoke about 75 levels but does it go further lower before it makes above 75, how will it shape up in the Q1 of 2010?

 

A: I think that is the key because we have had this weak dollar tune for most of the year and we are still trading at 7-8% off the low for that index. When I look at my timing models, when I get a feeling that its still going sideways, I get a sense that the timing is right for a rally in the dollar index. One thing, which I think is particularly interesting to note and that is the open interest for the dollar index. It actually has turned around from a negative to a positive. I think when we get that break through that 75.80, that will confirm to me that the bulls will probably have their way with the dollar particularly the first couple of weeks of the new year.

 

Q: Where is crude headed?

 

A: Crude oil is trapped in this range and we haven't really seen it break out for some time and in fact it is one of those commodities that has done nothing, so it's in this lackluster range.

 

I do think there are few sparks on the horizon between Britain and Iran which might see the Middle East tension start to come back and then we might see a Middle East premium built back into the market. Also we are just heading into that winter period as well, so prices will actually look to try and gravitate higher but as I said they are in a solid range at the moment and I think I will only be keen to trade with a break through that USD 80 per barrel, outside that I think you can stay within this range.