Posted on 11/06/2012 9:50:45 PM PST by Tailgunner Joe
The dollar fell broadly in Asia on Wednesday as media projected U.S. President Barack Obama won a closely-fought election, ensuring that the Federal Reserve's quantitative easing will be in place.
The Democrats look set to retain a majority in the Senate while the Republicans also appear to be solidifying their control of the House of Representatives, keeping intact the risk of policy paralysis over the looming "fiscal cliff" -- a sharp fiscal tightening due to start next year.
"The Fed's quantitative easing is essentially a policy to cheapen the dollar. Republicans have been criticising the policy but it seems like that policy is likely to stay," said Yunosuke Ikeda, senior forex strategist at Nomura Securities.
The dollar fell to as low as 79.81 yen, nearly a full yen below its four-month high of 80.68 yen hit last week, before bouncing back slightly to 80.14 yen, still down 0.3 percent on the day.
An immediate support is seen at 79.275 yen, a low hit on October 30 right after the Bank of Japan's easing.
The dollar's drop came as the 10-year U.S. Treasuries yield dropped seven basis points to as low as 1.68 percent.
On top of Obama's support for quantitative easing, which Romney and many Republicans are opposed as a dangerous intervention that could stoke inflation, Obama's tougher stance on financial regulations is viewed as positive for bonds and negative for stocks.
"After the election, the market will likely shift its focus to the fiscal cliff. It's not clear what Obama can achieve (to reduce the impact of the fiscal cliff)," said Junya Tanase, chief FX strategist at JPMorgan Chase.
About $600 billion in government spending cuts and higher taxes will kick in early next year, unless U.S. lawmakers take steps to mitigate their impact.
(Excerpt) Read more at uk.reuters.com ...
“essentially a policy to cheapen the dollar”
Yes, known more simply as inflation. It’s just like counterfeiting, only the guys who do it own the hails so they won’t go to them.
Paladin2~ :” I’d suggest being REAL nice to your dog’s vet.”
You got that right !!
I’ll be I can get better health care from my vet - for both me and my dog , than I can from Medicaid and Obamacare !
“essentially a policy to cheapen the dollar”
Yes, known more simply as inflation. It’s just like counterfeiting, only the guys who do it own the jails, so they won’t go to them.
LLS
and ... my dog doesn’t drink !
I , on the other hand have been known to tip a few of the ‘ Harp ‘ !! ( well maybe more than a few !)
Silver up 2.69% today. Gold up 1.89%.
Yup. It’s all over but the crying.
I’d rather aim for the belly so they could meditate on their stupidity before expiring.
I’d rather like the cities to explode...I don’t care anymore...really don’t...hope the whites wise up and get the hell away, but since most of them are obammists, so be it...
As long as these matters are handled in a political arena we will perish in this political arena. Its a difficult issue to address and I fear we no longer have the courage nor the ability to address.
where is the nemesis for this administration?...
surely, all the businesses that have gotten screwed and thus all the rich people that have gotten screwed...won't take much more?
Steve Wynn, Donald Trump and many more.. they will multiply now..
they will move operations overseas if they can. (GM, Chrysler), cut workhours down to part time only (grocery, fast food) and many will probably go out of business
LOL, never thought of that.
“On the bright side, this will make our products cheaper for other countries to buy increasing our exports and make it more expensive to buy overseas goods.”
Hi—Your point is a good one but must be hedged a bit.
This is the traditional argument, that is, devalue the dollar and the cheaper price increases exports. But, if you are largely a service economy you aren’t exporting as many goods as manufacturing economies. If your raw materials are imported, your costs rise and any advantage is reduced. If there is foreign competition for your products and despite the dollar devaluation, the competition still has a labor cost advantage (think China), then you can’t win that game until your labor costs go much lower than is possible.
The devaluation argument doesn’t have the power it had before globalization.
It will be a minimum of one week before I watch FOX, my only US news channel.
I can not believe the stupidity of the American public today.
I think I left just in time.
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