Will April be the cruelest month for dollar longs? Certainly March offered them little cheer as the greenback lost more ground to the euro coming to within a few points of hitting the 2007 lows. The subprime fiasco weighed heavily on the unit as traders wondered if the US economy could outgrow the massive debt load incurred over the past decade. With stock margin debt at its highest level since the 2000 equity marker highs while overall debt to GDP ratio at the highest level ever, the question of how US will service all those obligations has been the primary preoccupation of FX traders. On the other hand, surprisingly strong reading in Manufacturing and persistently low unemployment claims suggest that the greenback may be down but not out. If the US economy continues to generate jobs, the additional growth in income will wash away many lending sins and the greenback may see strength yet again.
