Anyone think FOMC will do an emergency rate increase to try and build up the dollar; thus lowering cude?
no way. Will talk up the dollar as much as possible though. its been working surprisingly well when they do it lately. They say the concern is now inflation, and BOOM, the dollar rallies.
If trichet and Co. pull another increase, Fed will feel the pressure to follow suit. Increasing disparity between the 2 zones is fueling one currency and deflating another. The spread is adding to inflation pressures and if the spreads increase further it will only weaken USD further, thus adding more inflationary pressures. Most of the rate cuts were in response to the credit crisis worries. Now that it appears that worry has subsided, the Fed can take back some of the cuts. Emergency rate increase? No such thing. But look for rates around 2.5 by year end.
I wonder if USA dollar exchange rates and USA interest rate trends are beginning to change. I am looking at weekly futures charts of the US Dollar index and 10 year treasury note futures.
I can't know this but I think we are close to a intervention on the dollar by the central banks. The dollar gets stronger Oil crashes inflation comes under control and a huge bull market roars in the US and Europe.
The changes in interest rates and USA dollar exchange rates might be associated with this: Irish voters veto EU treaty - 14 hours ago Irish voters vetoed a painstakingly drafted treaty Friday that had been designed to streamline the European Union. Politicians from all of Ireland's major ... The Associated Press - 2733 related articles » Irish rejection not to affect Sweden's ratification process - Xinhua - 11 related articles » EU at crossroads after Irish vote - BBC News - 48 related articles » I recall during year 2005 France and Netherlands referendums rejecting the European Union treaty.
I think so. I've been a dollar bull for a few months now. We won't see rate cuts any time soon. I think rates will be flat for awhile, and then up if inflation stays ugly.
I think the US loses its AAA credit rating and reserve currency status in the next few years. In the meantime we pretend we are strong.
I think maybe it has already lost its credit rating in many eyes. As for losing reserve status, nothing else out there. lots of people are diversifying into the euro, but its too sketchy for a reserve currency as many economists don't know if it will even exist 5 years down the road. all it will take is for Italy or Spain to bail when their economies get bad enough, and the ECB keeps rates high. then the whole thing crumbles. this is a real possibility.