Posted on 05/01/2006 8:17:46 AM PDT by Crackingham
The dollar has embarked on a big decline that will see it fall against all leading currencies, according to analysts. The plunge is being prompted by America’s $800 billion (£438 billion) current-account deficit, they say.
The dollar has been under pressure following last weekend’s meeting of G7 finance ministers and central bankers, which emphasised “global imbalances” and said currencies should reflect economic fundamentals. Then China raised its key interest rate to 5.85%, its first hike for months, and Ben Bernanke, the new Federal Reserve chairman, hinted that American rates would pause at 5% after a rise in May. Analysts say that without interest-rate support, the dollar will be weighed down heavily by America’s imbalances.
“I think this is it,” said Tony Norfield, global head of currency strategy at ABN Amro. “The dollar has been supported by high yields but markets are saying that is no longer enough. The question for policymakers is going to be how to manage the dollar’s decline. It won’t be a one-way street but the fall is likely to be biggest against Asian currencies.”
The euro has already risen to an 11-month high of more than $1.26, while the dollar is at a three-month low of 113.70 against the yen. The Canadian dollar, known by traders as the “loonie”, rose to a 28-year high on Friday, boosted by a hike in Canadian interest rates. Sterling climbed back above $1.80, closing above $1.82 in New York on Friday.
Well I hope you enjoyed all those cheap chinese goods and driving domestic manufacturing into the dumper... now, not only will ya be stuck with foreign made crap, but you'll pay a nice premium for the privalege as well....
MSM gleefully reports: Dollar starts The Big Slide! Woo-Hoo!
you've heard it said, "buy the rumor, sell the news...". This is why. The dollar bounced for the first time in almost three weeks today.
So what? Where should we invest next?
Two big points here: 1) when you import the vast quantity of oil we import, you're going to have this problem. 2) when you provide the world economic leadership, you are going to have this problem.
Where?
Euro is 1.263.
The dollar has embarked on a big decline
If it just “embarked” on a decline, how do they know how “big” the decline will be?
Weird. It’s almost as if they just made it up.
These analysts know better than the currency markets, and can predict the future, yet somehow still must be making a living as analysts.
eu printed 12731 this morning. as small as it is, this is the biggest bounce I've seen since the breakdown.
Soros and Buffet have been betting against the dollar for two years. They may finally make some money from their anti-Americanism.
Well I hope you enjoyed all those cheap chinese goods and driving domestic manufacturing into the dumper... now, not only will ya be stuck with foreign made crap, but you'll pay a nice premium for the privalege as well....
That doesn’t even make any sense.
If foreign crap becomes too expensive, domestic manufacturing will flourish. We won’t be “stuck” with anything.
The market fixes such price problems. Not Pat Buchanan.
I've heard some putting the floor in on US 85 and then a bounce to 100 but I don't see that happening. IMHO
At any rate, I'm trading as if it won't, today... (-;
Soros perhaps... Buffet plays what he sees... he bet against the dollar and lost before... but he knows fundamentals like no ones business.... I'd not discount Buffet so readily.
bump
I think it's sort of a hobby for them...
Its only a good thing, if you have a few things, that don't exist:
1) Non protectionist markets at the other end of that "free trade" which we don't...
2) Domestic Production to be exported... which in many segments we no longer have.
3) Free trading currencies on the other side, which in reference to China we don't.
etc... etc.. etc...
However, why is the dollar slipping when the US economy is very strong? Are George Sorros and other speculators driving this?
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