The euro/$ started falling on the heels of Greenspan's comments in europe today, although he basically said nothing that wasa dollar supportive. His reported remarks included an acknowledgment that the markets would not support the US account deficit indefinitely but do have the capacity to finance it for a while if left alone. I guess this doesn't strike me as a reason for the dollar to rally, particularly ona day where US equities are getting hammered. Could there have been stealth intervention or is this just profit-taking that will be reversed later?
There has been NEGATIVE correlation between dollar and equities for a long time now. It shouldn't surprise people to see equities falling along with euro (dollar strength). Could be just a temporary unwinding of some hedge fund bets (long stock, long euro).
I agree with Illiquid. Profit taking, not stealth intervention. I think we are looking at a confused market... one that is frazzled and going from (G10/G7) announcement to announcement in delusion and panic (the best kind to make money in, right?) Regards,
Source: [ http://www.forbes.com/markets/newswire/2004/01/12/rtr1207252.html ] <European Central Bank President Jean-Claude Trichet, who said "brutal" currency moves were unwelcome.> What, exactly, denotes a "brutal currency move"?
Sometimes wacko G. North with some thoughts on the dollar and the Fed below. http://www.lewrockwell.com/north/north242.html
what are you talking about intervention? I don't see any reason for this week's fall other than technicals. Well maybe ECB officials' comments and the lower trade deficit. I am glad Trichet said continued euro appreciation was not welcome. IMO dollar is about to stage a major bounce, possibly a reversal bottom. We have to see how the rest of the month's activity unfolds. But it is likely this week 'range will engulf the previous one.
Recent strength is just a much needed and healthy pull back of a overextended drop, it will pull back some more before getting weaker again and surpassing recent lows. The numbers that have been mentioned have not really changed the overall outlook longer term, couple of pieces of "ok'ish" numbers (in a sea of bad) and small comment to neutralise the words (which people took to be far too bullish on the Euro for their likeing) from when ECB talked a week ago. If you look at the charts, Dollar has just got too weak too fast in past few weeks. All IMHO.