Strong Ifo and a Falling Dollar

In Barrons this week, Gene Epstein wrote an article about the dollar ("The Buck Takes Wing") and predicted it has hit the bottom and might rise the year ahead by at least five percent against other currencies. However, the greenback continued its devaluation this week and today it hit a 5 month low against the euro after Germany reported a strong Ifo figure. The fall might be due to traders wanting to clear their books before the holidays in Japan and the US, and the volume today Thursday is very low on the foreign exchange markets. Also, many investment banks could be booking their profits before they end their books. However, the Fed is unlikely to raise US rates further and the ECB is sounding increasingly hawkish. Maybe the carry-traders is also starting to unwind their positions now. We will see if Mr Epstein will be right, but i would not bet on it.