Is The Dollar Bottoming?

• February 18, 2003
• Vincent Mao

After last week’s report that no weapons of mass
destruction were found, stock index futures once again rallied as the
potential for war with Iraq continued to cool off. The dollar index also rose.
Meanwhile the safe haven of gold again sold off, but treasuries ended high.  And
oil continued its push into two-year highs.

As plans for war are being put on hold, stock index futures rallied sharply
to start of this abbreviated trading week. UK Prime Minister Tony Blair said
today that “there’s no rush to war” and President Bush offered to give diplomacy
two more weeks before deciding to attack Iraq.

Stock index futures were also boosted as Wal-Mart
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better-than-expected results. At the close, the March Dow futures
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gained 118 to 8047, March S&Ps
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NDX futures
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have already broken above their 20-day moving averages. The next areas of
resistance come in at 8153 and 862, respectively. 

The dollar index jumped for the second straight session. The March Dollar
index
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Despite the delay for war, treasury futures shook off morning weakness.
Treasury futures did benefit from the negative New York factory index. The index
fell to 19.59, its lowest reading since October. The March 10 year contract
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9/32 to 112 20/32. 

Gold tumbled to a month-and-half low. April gold
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344.30. Nearby support for gold is just below at  $340. 

Crude oil finished slightly higher higher. Despite the delay in war and
Venezuela saying that production is back to near pre-strike levels, March crude
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strike in Nigeria that began this past weekend. Meanwhile natural gas jumped
amid the blizzard back East and forecast for colder weather out West. Natural
gas for March delivery
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Vincent Mao