U.S. dollar continues to 'get no respect'

Fed, oil, trend traders

Independent currency trader Jim Dietz told BloggingStocks Tuesday that three factors are driving the dollar lower: the Fed, high oil prices and trend traders.

"The big factor clearly is the Fed. With the likelihood of another [interest rate] cut, that will make the higher interest rate currencies more attractive," Dietz said. "Oil also is a factor, because the U.S. imports a great deal of oil, so that's a lot of money going out of the dollar to overseas currencies. Then there is just sentiment, and the trend is dollar-short, with minor pullbacks, so people are just going with the trend."

Dietz added that the general belief the European Central Bank will maintain benchmark interest rates at its next meeting Thursday isn't helping the dollar either. The ECB is expected to keep its key rate at 4% on November 8, according to a Bloomberg News survey. Crude oil also gained $2.01 to $95.99 Tuesday morning.

Up ahead: euro at $1.50?

Further, Dietz said he didn't think the $1.46 barrier would provide much resistance for the euro.

"There's sentiment now that the euro will clear and stay above $1.46 in the next few sessions. The next major resistance is at $1.50," Dietz said. "That has both typical resistance and psychological resistance because it's a 5-0, the half dollar mark."

Dietz would not venture to predict when the long-term dollar down-trend would end.

"That's one for the economists and the specialists to figure out," he said. "Right now, it's just dollar down until the economic fundamentals change."