Get ready for a Volatile Week in the Markets

Chuck is getting on a plane bound for Mexico this morning, so I will be bringing you the Pfennig this week. As usual, Chuck left me a note to share with all the readers last night, so heeerrreee’s Chuck:

On Friday, we saw more healing in the currencies and metals, from the price action earlier in the week. Gold jumped up $15, and I have to think that some of that gain came from the heightened risk from the packages from Yemen. I tell you all the time that we have a ton of nut-jobs running around the world, wanting to blow this up, or wipe this country off the map… But gold – with silver tagging along – will always be sought when geopolitical risks elevate.

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US Dollar Slightly Stronger on G-20 Meeting Expectations

The volatility we’ve seen for the better part of the week carried over into Thursday, but we didn’t have the big swings like Tuesday and Wednesday.

As I left you yesterday morning, the dollar index was down slightly and most currencies were still seeing the carry over effect from the collective appreciation of Wednesday, but things started to turn as we made our way into late morning and into the afternoon. It looks as though, at least from what I could tell, there were two drivers behind the dollar strength yesterday. It started with the data releases that showed some slight improvement, but more importantly, they didn’t disappoint.

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Unemployment and Consumer Debt: The 800 lb Gorilla in the Room

When I left you Tuesday morning, the currencies were hanging on, but as Chuck explained yesterday, we saw a considerable sell-off in response to the rate increase from China as the day wore on. The euro (EUR) had briefly dipped into the 1.36 handle and the dollar index rallied the most in two months. It looks as though this was just a knee-jerk reaction as we opened yesterday morning with the euro in the mid 1.38 handle and rose all the way up to 1.3991. It was as if Tuesday was gone with the wind, like it never happened.

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Geithner Advocates a Weak Dollar Policy

The currencies and precious metals have been changing positions versus the dollar for the last three trading days. A week ago, we were looking at levels not seen in some currencies, ever…and for others not seen in over two years! I told you a week ago that I somewhat expected this to happen, as the currencies and metals had moved too far too fast, and needed to consolidate. This is what we’ve seen so far the last three days… And, also, like I’ve told you… I don’t expect this dollar strength to last too long, for the dollar has no yield to attract too many investors.

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US Dollar Rises on QE2 Theories

It was fairly uneventful in the currency market yesterday, but the dollar held the hammer at the end of the day, as there were only two currencies that posted gains. I’ll jump into currencies in a moment, but first, we’ll take a look at the results of the economic reports released here in the US. Right out of the gate, we had the TIC flows (security purchases by foreigners), Industrial Production, and Capacity Utilization, which were then followed by a measure of housing.

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Renminbi Appreciates for the Third Consecutive Day

Yesterday morning, the currencies and precious metals were soaring versus the dollar, and I said we would have to see what the NY boys and girls thought about it all when they arrived at their trading desks. Apparently, they didn’t think too much about anything, as the currencies just drifted the rest of the day. Yes, there was some profit taking, but not much, leaving the currencies and precious metals adrift…

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IMF-G7 Weekend Will Just Hurt the Dollar More

Central bankers and finance ministers from around the world are converging on Washington, DC this weekend to discuss, among other things, the global wave of currency devaluations. But the most likely thing the meetings will accomplish is to propel the major and emerging market currencies even higher against the US dollar.

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Currency Wars?

Yesterday, we watched the currencies and precious metals rise all day long, in small increments. But the overnight markets have taken the currencies even higher! For instance, the Aussie dollar (AUD) is near 99-cents, and a new all-time record high! And gold is up another $9 this morning to $1,358!

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Aussie Dollars Lead a Currency Rally

All I can say about yesterday’s price action in the currencies and precious metals versus the dollar is… WOW! OK… You knew that wasn’t all I was going to say about the moves yesterday! So, let’s get going!

The currencies are on an all-out assault on the dollar, folks… But the BIG winner from yesterday was gold… When I left the office, gold was up $25 on the day! And the “offset to the dollarâ€� euro (EUR)? Well, the single unit gained over 1 1/4-cents versus the dollar yesterday, and has added 1/3-cent this morning… Oh, and gold? It has added another $5 to yesterday’s $25 gain! WOW!

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Europe’s Best Currency (Hint: It’s Not the Euro)

When it comes to high-yield investments, few instruments have surpassed emerging market currencies over the past two years or so. As equities and commodities struggled, BRIC (Brazil, Russia, India and China) currencies soared. The Russian ruble (RUB) turned in an 18% return in 2009, while the Brazilian real (BRL) gained 30%.

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