Dollar outlook , impact on industrial sectors performance Dr. Warren Huang

US dollar outlook and its impact on industrial sectors  performance, 

Comment by Warren Huang -Wall Street Journal Market Beat Blog May 5, 2008 at 2:10 pm
We have to look at the dollar fundamental price and its impact on industrial sectors mechanism to track its prices. There are not easy statistical correlation. Dollar bull due to 6 years economic expansion and rate hikes series, while dollar weakness due to economic slowdown, recession fear resulted rate cuts expectation. Utility,  consumer goods goods are heavily related to domestic consumer spending, strong dollar raise buying power while utility consumer going up with more manufacturing plant demand for utility. But continue housing market slump will drag consumer demand, ( economic stimulus will not be sufficient to support the demand slowdown) economics into recession, manufacturing activity ISM already down to 47 .Despite ISM service sectors up to 52, it will not be sustainable stay above 50 after second quarter stimulus effect is over. Recent dollar strength come from better than expected 0.6 % GDP growth and soaring oil prices pushed inflation higher, forced Fed to end rate cycle earlier, facing inflation fighting.   However housing slump continue depress the economy, Fed facing Trilemma on rate, GDP, inflation, dollar. details on

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