The dollar rained on the currencies’ parade on Friday, as a lack of data and interest rate increase in India chased investors back into the greenback. The passage of healthcare reform by the House is dominating the news wires this morning, so I will have to try and figure out what that will mean for the currency markets. But I will begin in Europe…
[Read more...]Discovering Recovery In Wall Street and Washington
February 25, 2010 By Leave a Comment
The recession is over. Everyone says so. Well, not everyone actually…just economists…especially economists from Wall Street and Washington.
In a research note entitled, “Return to Normalcy,” John Silvia, Chief Economist at Wachovia, gushes, “With the war against the Great Recession over, our newly reappointed head of the Federal Reserve now seeks to take us back to normalcy in the financial markets. Let’s trust that he too ushers in a decade of prosperity.
[Read more...]Dollar Rallies on Greek Tragedy
January 15, 2010 By Leave a Comment
The euro (EUR) has led the non-dollar currencies down versus the dollar overnight. After spending three days this week hovering back and forth over and under the 1.45 handle, the euro finally succumbed to some selling.
The selling is being blamed on the Greece story once again… I mean, come on! Haven’t we already been there, done that, and bought the T-Shirt, with Greece? But here we are, this morning, looking at the euro trading below 1.44… And all the other currencies have backed off versus the dollar… Even the Swiss franc (CHF), and Canadian dollar/loonie (CAD), have backed off overnight. And of course, in keeping with the trading theme of 2009, the only currency to rally with the dollar is the Japanese yen (JPY)!
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Betting Against the Euro Not a Long-Term Trade
The sovereign default fears that gripped the markets earlier this week were all but forgotten over the past 24 hours as German Chancellor Angela Merkel pushed for a rapid rescue of Greece. Merkel has played her cards very well, taking advantage of the Greek crisis whenever possible. She held Germany out of the original rescue package, demanding more IMF involvement and only agreeing to participate after getting her way. During the crisis, she has solidified Germany’s position as the leader of the EU. And while she has not made many friends in the weaker members of the EU, her popularity with Germans has increased.
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