December has become a time to sell back not only those unwanted gifts, but also the dollar. The Wall Street Journal reported yesterday that from 2000 to 2007, hedge funds have bet long on the euro in the last week of December, expecting it to rise as investors shed dollars.
The article goes on to explain that there are additional reasons to expect that this December will be even unfriendlier to the dollar than usual:
The repatriation among U.S. investors from foreign assets such as stocks has been waning. In contrast, foreign companies are expected to sell the dollar and repatriate money to window-dress their balance books at year end, analysts said.
Of course, when the Fed cuts rates, as it is likely to do today, that will only accelerate these trends by pumping more dollars into the economy. The question is only, "By how much?"
It would seem, then, that the trend of U.S. exports waning over the last few months may be turning around soon because the dollar will stop rising. Will we return to the time a year ago when exports were booming and small businesses were cashing in? It's very hard to predict how sustainable these trends are. But if an export boost is coming, now might be a good time to follow Laurel Delaney's steps to get an export business started. Check back to the spot as she will be updating it with more tips in the coming week.
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Laurel Delaney of IL 1:44PM December 21, 2008