Normally I’d say that the US Dollar will continue to strengthen as reality turns to the market and the dollar looks like a better place to be, but it’s hard to say. It really is because there are a few pieces of news that we need to pay attention too.

Oil of course! Like I described in a previous post, the value of the US dollar is always changed when there is movements in oil. America isn’t a major oil producer, only a major buyer. The price of oil going up is generally perceived as a bad thing for the dollar and when oil goes down it is a good thing.

What was the big news on Friday? Cap and Trade. This is the government bill that will cap carbon dioxide emissions, which is all energies that we make in large numbers. This will essentially drive down the production of oil and increase the price of it. I know the bill only pass in the House and probably won’t get through the Senate, but it is still something that can weigh on the market.

Basically, it’s hard to call what will happen. On the one hand we could see a continuing trend of the US dollar strengthening or we could see oil jump and push the price of the dollar down.