Dollar Heads for Worst Quarter Versus Euro in More Than 2 Years

Sort by newest Sort by date
Dollar Fluctuatuins

What spelling ehhhhh???? What else do you call the dollar path of late anyway....nothing like I ever seen.......

I believe the dollar will weaken one more time and then change direction in the near future......over the next week......must mean an interest rate increase is in the near future.....and more to come possibly......this could change the path of the F fund for a while also......or is there another way to stop the economy from heating up.....

I suppose if they don't want the interest rates to rise again you have to stop the economy with oil prices......so, thats the "Big Thought of the Day" (BTD).....and it seems very likely.....it does keep the dollar cheap and therefore our exports overseas are economical to the locals overthere......the best of both worlds for big business.....not so sure for the rest of us......buy foreign currency....and get on the train.....
 
There appears to be no let up on the pressures on the dollar. The trend is down down down. The I fund looks mighty tasty.
 
Oceansideguy said:
There appears to be no let up on the pressures on the dollar. The trend is down down down. The I fund looks mighty tasty.
Click to expand...
Wonder if Bernie is even concerned about where American investors have been tossing their money lately. Will the open flood gates cause him to raise interest rates? Sure wish Wednesday was over so I could see if my guts were twisted tight enough... for good reason. :sick:
 
I think those in the I fund should relax. The hike is built in, and regardless of a possible future pause or not, many factors seem to be driving down the USD (as seen over the last several months even though the rate hikes have marched on). The USD will likely continue to drop, though this week we may see some volatility. Stay tuned, avoid whipsaws and falling knives. Not a time for erratic IFTs.

Good luck, and buckle up... :D
 
off TT......post by mr dev:

If you remember, I had post a messeage few weeks ago to signify the importance of a global change in interest rate trends because first time in years all the major central banks from Europe and Japan had joined US by rasing rates simultaneously.

I was bearish that time as it initially chocked liquidity out of some leading markets like Brazil, Arjantin, Turkey, Mexico ... I thought the weakness would eventually spread to the other markets. But soon after Fed decided to discontinue M3 reporting, Gold took off. Dollar started weakening and Rates brokeout...Us indices strengthened.

I didnt realize that Fed would go this far in printing money and hide it from the world.

It is true that more risks are now associated with the liquidity over the long term due to the rates but for the moment , odds highly favor the Fed is running the printing facility full capacity as this is just the beginning of their secrecy.
I am more bearish on our economic future but I can not ignore this unstoppable and artificial short term liquidity pump extending our borrowed time.

Even the most interest rate sensitive indices, Nasdaq and Russell are telling me that the interest rates could be greatly overwhelmed by the printing activity in near term.

I am bullish on Nasdaq and fully long NDX but I also have concerns like Crude and Sentiment surge. All of a sudden I see everybody started talking about NDX strength and index breakouts here and there as if they happened over the weekend.
If Crude moves further towards the highs , it will be a lot more easy for me to sell Nasdaq into the strength especially if near the channel top. This doesnt mean I will change my bullish stand. Not as long as the tape says so.
 
http://www.bloomberg.com/apps/news?pid=10000103&sid=aWAnMhozL0rM&refer=us

Interesting read and easy to understand

i was waiting for this type of correction, but the moves i make are usually small -- no more than 15% from stocks to bonds/G-fund -- so i profited/saved a little anyway.

The weak dollar/inflation worry has me ticked off for a couple of reasons: the I-Bond has fallen out of bed since it was reset his month -- from 6.75% to 2.4%. Now if inflation was a concern, how come such a huge drop?

Secondly, inflation -- now it seems -- is expected to come in the form of higher import prices.

We will be tested now ... in regards to how higher gasoline prices will affect the economy. Bob Brinker has said for years that it acts as a drag on the economy. He said it acts like a tax increase, so in that regard it is not inflationary. BUT most of the oil we buy now is from overseas; we pay in dollars; the trade deficit increases; the dollar further weakens. It will be interesting to find out which one of the two will dominate.

Brinker was very correct in Jan 2000 and in March 2003, so it is hard to bet against him. Will he ever be wrong? hmmmmmmmm Is he due for a mistake?

It would be nice if oil prices dropped to more reasonable levels. Remember when analysts were saying prices should be in the mid-$50's?
 
Quips said:
http://www.bloomberg.com/apps/news?pid=10000103&sid=aWAnMhozL0rM&refer=us

Interesting read and easy to understand

i was waiting for this type of correction, but the moves i make are usually small -- no more than 15% from stocks to bonds/G-fund -- so i profited/saved a little anyway.

The weak dollar/inflation worry has me ticked off for a couple of reasons: the I-Bond has fallen out of bed since it was reset his month -- from 6.75% to 2.4%. Now if inflation was a concern, how come such a huge drop?

Secondly, inflation -- now it seems -- is expected to come in the form of higher import prices.

We will be tested now ... in regards to how higher gasoline prices will affect the economy. Bob Brinker has said for years that it acts as a drag on the economy. He said it acts like a tax increase, so in that regard it is not inflationary. BUT most of the oil we buy now is from overseas; we pay in dollars; the trade deficit increases; the dollar further weakens. It will be interesting to find out which one of the two will dominate.

Brinker was very correct in Jan 2000 and in March 2003, so it is hard to bet against him. Will he ever be wrong? hmmmmmmmm Is he due for a mistake?

It would be nice if oil prices dropped to more reasonable levels. Remember when analysts were saying prices should be in the mid-$50's?
Click to expand...
It's a proverbial dog pile coming at us all.
 
What Bernanke and the Fed are looking for is a bailout.

The Fed is hoping that US government debt instruments will continue to be snapped up by overseas central banks ... and if that continues to happen the Fed will not need to raise interest rates.

But, hey, who would be willing to purchase such things when there is no interest in Washington to stop cutting taxes and to start cutting spending? My guess is only a fool would continue to finance such an arrogant lifestyle.
Americans want their tax cuts and they want their government programs.

Lots of luck.

Maybe it is in the best interest of that fool to finance such extravagence ... if his or her nation's employment/unemployment rate was affected in a major way by it. It would be in their interest to keep the dollar stronger rather than weaker: and their exports cheaper rather than more expensive since its own people can't afford to buy the products they export to other countries

I can't see the Fed keeping rates where they are without increased overseas purchases (bailout) of US debt. And it is up to those purchasers to support the dollar ... even to protect it for their own self interest.

Can anyone out there see the day when overseas central banks purchase dollars -- or US debt -- with its own sovereign currency like a home buyer in America would purchase a house with an ARM? Our government would repay that debt in which currency and at what interest rate? In cheaper dollars and higher interest rates?

I suppose a wilder scenario would tie the ARM to the value of gold ... a more or less world monetary standard. Maybe that is what the holders of American debt are doing now: investing their current purchases of US debt into gold future contracts. Or oil future contracts. The latter would be particularly devastating: it would really put a leash on beaucoup Americans, but I think it would also deteriorate all our lifestyles to some extent.

If I were in that position of being America's lender, sure a crap I'd want some kind of leverage over my loan/bailout to them.
 
Last edited:
Yeah, Wimpy has a good head; the only disagreement I have with him is about the priority about gold.

Yet one can hardly disagree about the concepts of fiat currencies and -- what is it called -- prosperity based on debt(?).

I'm not a gold bug.
 
Quips said:
Yeah, Wimpy has a good head; the only disagreement I have with him is about the priority about gold.

Yet one can hardly disagree about the concepts of fiat currencies and -- what is it called -- prosperity based on debt(?).

I'm not a gold bug.
Click to expand...


I can appreciate your position Quips.

I am a gold bug and have a very hefty position in the metals; physical and stock. There are an increasing number of non-goldbugs who are seeing the value of gold simply as an insurance hedge against an unknown and uncertain future and are carrying 10% of their net worth in physical gold to accomplish that hedge. They disdain their gold insurance position as much as I disdain paying the premiums on various types of insurance to include car, health, life, and rental insurance...but I carry it nonetheless. Being properly insured against the unknown and uncertain is important...especially when talking about the calamities associated with a fiat money system that appears to be unraveling.

For those currently in the I-Fund, don't despair. The dollar is a bouncing ball going down a very long flight of stairs. Depending on the point of impact on the steps it can appear to be defying gravity at times, but gravity will win out and the ball (the dollar) will continue on down.
 
Re: Financial Nukes of Mass Destruction

http://en.wikipedia.org/wiki/Iranian_oil_bourse

Iranian oil bourse - From Wikipedia, the free encyclopedia

"The Iranian Oil Bourse (IOB) is a commodity exchange which opened on February 17, 2008. ... The IOB is intended as an oil bourse for petroleum, petrochemicals and gas in various currencies, primarily the euro and Iranian rial and a basket of other major currencies.

The geographical location is at the Persian Gulf island of Kish which is designated by Iran as a free trade zone....

During 2007, Iran asked its petroleum customers to pay in non-dollar currencies. By December 8, 2007, Iran reported to have converted all of its oil export payments to non-dollar currencies. ...

Currently the Kish Bourse is only trading in oil-derived products, generally those used as feedstock for the plastics and pharmaceutical industries.

However, officially published statements by Iranian oil minister Gholamhossein Nozari indicate that the second phase, to establish trading in crude oil directly, which has been suggested might one day perhaps create a "Caspian Crude" benchmark price analogous to Brent Crude or WTI will only be started after the Bourse has demonstrated a reasonable period of trouble-free running."

Is it just me, or does anyone else anticipate that Iran may run into difficulties establishing a "reasonable period of trouble-free running?

Something of note that I find even more interesting is the today's announcement by the St. Petersburg International Commodity Echange, that it will have its first ascending-price auction for fuel on October 15th... It will be an interesting October for the US Stock Market... and the US Dollar...

http://www.oilandgaseurasia.com/news/p/0/news/5768

The Saint Petersburg International Commodity Exchange is about to start

"TNK-BP Will Hold an Ascending-Price Auction at the Saint Petersburg International Commodity Exchange in October with the First Large Fuel Lot

The Saint Petersburg International Commodity Exchange is about to start conducting ascending-price auctions (English auctions) for the first time in its practice.

The first ascending-price auction is requested by TNK-BP and scheduled for October 15.The auction will offer 10,080 tons of light diesel fuel L—0.2—62 from the Ryazan Oil Refinery at a reserve price of 13,000 rubles per ton, 1,980 tons of Normal—80 gasoline from the Ryazan Oil Refinery at a reserve price of 20,000 rubles per ton, and 4,320 tons of Normal—80 gasoline from Yaroslavnefteorgsintez (YaNOS) at a reserve price of 20,000 rubles per ton.

The auction will last for 50 minutes with a bid step of 10 rubles.The commodity exchange so far held only double auctions and two-way transactions.Reports from the commodity exchange say that adoption of unilateral auctions will expand the possibilities of participants to sell their goods at the Saint Petersburg International Commodity Exchange.

Sellers may get higher prices for their goods in ascending-price auctions.TNK-BP said to the Petroleum Information Agency (ANI) that this kind of exchange trade is used for the first time and allows selling large volumes of products in single lots.

Ascending-price auction is one of the kinds of open trade of oil products that has not been used in Russian practice so far. Selling large lots of fuel in auctions is good for TNK-BP as it raises the efficiency of offload and supply logistics. According to the results of October 15 auction, we will make our decision on further trades based on the ascending-price auction mechanism,” said a representative of TNK-BP.TNK-BP will continue selling its oil products in exchange auctions and building up the volume of such sales, added the company representative.

“We think that diversification of the open trade of oil products using the exchange trade mechanisms will increase the number of potential buyers, enhance the transparency and liquidity of the market of oil products, and, as a result, raise the performance efficiency of the company.

Exchange trade of oil products in Russia is a very promising way of conducting the business,” said the representative of TNK-BP.TNK-BP started trades at the Saint Petersburg International Commodity Exchange in March 2009 and sold there approximately 50,000 tons of oil products (diesel fuel, gasoline, and jet fuel). ..."

...and then of course, China and Brazil announced that they are going to conduct bilateral trade in Real and Yuan instead of US dollar...

http://en.mercopress.com/2009/06/29...l-trade-in-real-and-yuan-instead-of-us-dollar

"The Brazilian Central Bank announced it had reached an initial understanding with China for the gradual elimination of the US dollar in bilateral trade operations which in 2009 are estimated to reach 40 billion US dollars.


“We have reached an initial understanding and we will begin working on the issue” to use the Real and the Yuan in bilateral trade said a spokesperson for the Brazilian Central Bank.

Brazil’s Central bank chairman Henrique Meirelles met Sunday with his Chinese counterpart Zhou Xiaochuan in Switzerland where they are participating in a meeting of the International Bank of Settlements.

However Mr. Meirelles pointed out that there was a difference between using local currencies for bilateral trade operations and deciding on moving towards a new currency which would replace the US dollar.

“For the US dollar to be left aside as an international reserve currency there must be another currency which must perform that role”, Meirelles said quoted by the Folha de Sao Paulo. ...

China became this year Brazil’s main trade partner ahead of the US. Brazilian exports to China in the first quarter of this year jumped 64% compared to the same period a year ago. Brazil sells mainly soy and iron to China and this year those sales soared 70% and 50%.

Oil is also expected to join the list of commodities sold to China once Brazil begins the commercial development of the recently discovered sub-salt hydrocarbons resources. In anticipation of these operations the Chinese government banking system extended Brazil and its government managed oil corporation a 10 billion US dollars loan.

China also announced that it was ruling out any “sudden changes” to its foreign- reserves policy. China is the world’s main holder of US federal bonds. ..."



 
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSTmuCr.RD88

Russia, China to Promote Ruble, Yuan Use in Trade (Update2) - June 17, 2009

"By Lyubov Pronina and Alex Nicholson

June 17 (Bloomberg) -- The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar a day after they took part in the first summit of the so-called BRIC countries.

“We agreed to take further steps in this direction, including, perhaps, by adjusting contracts and laws that already exist,” Russian President Dmitry Medvedev told reporters in the Kremlin today after talks with his Chinese counterpart Hu Jintao.

Russia, the world’s biggest energy supplier, wants to start selling oil to China in rubles, said Deputy Prime Minister Igor Sechin, who is also chairman of OAO Rosneft, Russia’s biggest oil company. Energy sales in rubles are a “strategic” issue for Russia, he said, adding that oil exports to China over the next 20 years will surpass $100 billion.

Brazil, Russia, India and China agreed yesterday to push for more clout in global financial institutions during what Medvedev called BRIC’s “historic” first summit in the Ural Mountains city of Yekaterinburg. China and Russia have called for a more diversified financial system to give emerging economies a bigger say in economic affairs, including the creation of alternatives to the U.S. dollar as a reserve currency.

‘Symbolic Value’
“Expanding the use of national currencies in mutual settlements is a separate, important task,” Medvedev said. China has the world’s biggest foreign-currency reserves, almost $2 trillion, while Russia is third with more than $400 billion.

The ruble weakened 0.1 percent to 31.2396 against the dollar in Moscow today after earlier strengthening as much as 0.4 percent. The yuan was little changed against the dollar on speculation China will prevent appreciation to avoid a prolonged slump in the nation’s exports.

It will take “at least a couple of years” to start converting the first contracts into domestic currencies, said Elina Ribakova, Citigroup Inc.’s chief economist in Moscow.

Today’s announcement has “important symbolic value,” she said. “If you take a 10- or 20-year perspective, trade between Russia and China will increase significantly.”

Total trade between the neighboring countries reached a record $56.8 billion last year, according to the Kremlin.

After today’s Moscow meeting, Russia and China signed an agreement worth $3 billion to cooperate in trade and investment in areas including light industries, high technology and energy.

U.S. Deficit
The dollar’s status has come into question as leaders of the BRIC nations consider substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the U.S. dependent on foreign financing. China alone owns about $744 billion of U.S. Treasury bonds among its $2 trillion of foreign- exchange reserves.

Russian central bank First Deputy Chairman Alexei Ulyukayev’s comment on June 10 that Russia may sell some of its U.S. bonds to buy International Monetary Fund notes helped push 10-year yields on Treasuries to the highest level since October.

Brazilian President Luiz Inacio Lula da Silva today denied that BRIC leaders discussed buying each other’s bonds at the Yekaterinburg summit, after Medvedev’s top economic adviser said the matter might be discussed.

Dollar bonds sold by China earned 11.4 percent in the past year, more than double the 4.6 percent for debt in yuan, JPMorgan Chase & Co. indexes show. Brazil’s U.S. currency bonds returned 3.6 percent as real-based notes lost 4.9 percent, and Russia’s dollar bonds outperformed with a 1.9 percent loss compared with a 7 percent drop in ruble debt. India doesn’t have dollar-denominated debt. "
 
http://www.bloomberg.com/apps/news?pid=20601101&sid=aPvINteMcST0

G-7 Avoids Dollar Criticism, Warns Against Volatility (Update1) - 3 OCT 09

"Oct. 3 (Bloomberg) -- Group of Seven finance chiefs stopped short of singling out the weaker dollar for criticism and stuck to their mantra that “disorderly” swings in currencies threaten economic growth.

“Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability,” G-7 ministers and central bankers said in a statement after talks today in Istanbul. Officials welcomed China’s “continued commitment” to a more flexible currency, which they said would promote balanced global growth. The statement repeated language used at the last G-7 in April."

READ: ....move to a trading currency other than the US Dollar...

"The group met at the end of a week in which policy makers from France to Canada signaled concern that a sliding dollar risks impeding their recoveries from the deepest global recession since World War II. The dollar has dropped 14 percent against a basket of seven currencies since early March.

“Following the escalated rhetoric, investors may have been braced for some escalation in language,” said Sophia Drossos, co-head for global foreign exchange strategy at Morgan Stanley in New York. “Since we didn’t get it, I look for the trend of dollar weakness to reassert itself.”"

"A weaker dollar risks hurting economies outside the U.S. by making the exports of companies such as Japan’s Canon Inc. more expensive. At the same time, Treasury Secretary Timothy Geithner finds himself having to defend the dollar’s status as the world’s sole reserve currency."
 
You must log in or register to reply here.

Similar threads

tsptalk
  • Article Article
A better than expected jobs report lifts stocks, but...
Replies
0
Views
162
tsptalk
tsptalk
tsptalk
  • Article Article
Stocks bounce bad from steep morning losses
Replies
0
Views
221
tsptalk
tsptalk
tsptalk
  • Article Article
Bond yields putting the pressure on stocks -- holiday reversal?
Replies
0
Views
299
tsptalk
tsptalk
tsptalk
  • Article Article
Stocks waver but a pause would not be the worst thing to happen
Replies
0
Views
204
tsptalk
tsptalk
tsptalk
  • Article Article
Can stocks reverse the pre-holiday reversal?
Replies
0
Views
237
tsptalk
tsptalk
Back
Top