New York, New York (PressExposure) October 11, 2009 -- "Mann International" the Asian-based investment broker says that the main impetus to buoyant US equity values is the weak dollar and that they are out of kilter with the condition of the real economy.
Sources close to "Mann International" say the firm's analysts believe that recent dollar-bearish sentiment has extended the rally to unsustainable levels.
The dollar has fallen through what was considered to be strong technical support at 76 on the dollar index (DXY) which measures its value against a basket of currencies. According to the sources, this is partly due to news that emerged this week of secret talks between major oil producers and importers aimed at replacing the US dollar as the currency in which oil is priced.
Although "Mann International" does not believe that such an event will occur in the immediate future, sources feel that the mere suggestion is indicative of a fundamental shift in sentiment towards the role of the dollar as the world's reserve currency.
As the dollar has weakened, investors' funds have flowed into equities and commodities as they seek a hedge against the falling value of what was once considered a safe-haven currency.
"Mann International" , however, believe that the dollar will stage a rally in the coming days and this will more than likely see stocks sell off sharply.