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To: arrogantsob
big jump in favor of the Dollar means the market is forcasting a recession

You mean during REAGAN's good times and the prosperity under Clinton the dollar was weak?
282 posted on 09/29/2008 1:07:29 PM PDT by uncbob
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To: uncbob

The comparison of exchange rates also must consider many factors all at once. I was referring strictly to one aspect of them. Any one of the factors can be impacted by others including political events. When turmoil erupts people flock to safe currencies like that with a strong government.

Now it is possible that some of the recent strength is because of political events: Russia-Venezula love-in, Syrian troops on Lebanon border, Pakistani actions against Al-Queda, etc. But I would guess that most of it is forecasting recession. A good bill addressing the real issue could reverse that forecast.

Another factor is that the rejection of a massive new government expenditure has strengthened the dollar because of its impact on the National Debt. Increase in Debt causes a decrease in the foreign exchange market. Decrease in debt strengthens dollar.


295 posted on 09/29/2008 1:25:11 PM PDT by arrogantsob (Hero vs Zero)
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