With the continued weakening of other currencies and in particular the softening of oil, gas and other commodities the dollar has had five good weeks. Much of that gain has been against the Euro and it probably will continue for some time with a blip here and there. Oil has continued its drop to $112 on the NY Mercantile. This will bode well for the US and Europe while hampering the oil producing nations. For one, it isn't helping the Russian bottom line.
It wasn't that long ago that oil reached $147 with +$200 looking a true reality. Short of some significant overseas developments (never count those out and those that benefit from them) oil could drop dramatically farther. There is too much of it at the moment in reserves around the world. Not near enough, if you ask me, though.
The developments could bring the economy's forecast up for the remaining months, maybe in time for election day. Still, there are some large hurdles ahead and the banking write offs are not done yet. We will certainly not see much relief in housing and autos until then.
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