Is the Bottom Nearing for the U.S. Dollar?
By Phil Streible
The latest data on weekly unemployment claims and gross domestic product has pushed both the stock market and the U.S. dollar down, but I have a slight inclination to believe the dollar will see a rebound before year-end. A Federal Reserve policy meeting is coming up next week, and the market could be volatile. A straddle in the Dollar Index Futures would be a good strategy to play dollar volatility in either direction, or consider a call spread if you are bullish.
A straddle involves buying a call and put at same month and strike price. What you are looking for is increased volatility—you don’t have to pick a direction. If the Dollar Index Futures, traded at the ICE Futures Exchange, gets down to 72, that’s what I’d look at in terms of setting up a straddle.