The USD bottomed back in early May (naturally as stocks and the...

The USD bottomed back in early May (naturally as stocks and the euro topped).

The USD will continue to strengthen not because of any improvement in the US economy, but because of even greater risks in Europe (currency values are merely relative).

Next week the focus will turn firmly back on the European debt debacle as fund member nations meet to re-affirm their contributions to the EFSF (bailout fund). With legal challenges now under way in Germany and growing discontent among its taxpaying voters, we could soon see Greece & Ireland left out in the cold and Spain & Italy forced to fend for themselves (in the 'free' bond market). Without Germany's explicit support, the ECB would be hamstrung. Watch the euro as it starts to reflect this general erosion of confidence.