Trillion dollar bailouts, trillion dollar deficits, and the largest spending bill in US history. These days, one would think that with all this spending, the US Dollar would be as popular as a Wall Street CEO. However, this morning, the US Dollar index hit its highest level since April 2006 even as news of another bailout for AIG hit the tapes. But when you're competing against the likes of Europe, the dollar suddenly doesn't look so bad. In a similar comparison, normally Lloyd Blankfein and Jamie Dimon would be worried about their jobs after GS and JPM have both declined by roughly 60%. But when your competition is Jimmy Cayne, Stan O'Neal, John Thain, Dick Fuld, etc... they look like superstars.
Longer term, however, the US Dollar Index remains well off its highs of this decade, or even the last six years. As shown below, as recently as 2003, the index traded above 100, which is about 12.5% above current levels.
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