Reinko

Pending Fed Rate Decision, Dollar Loses Steam

Amazing; about 250 pips up in the last 24 hours on the €/US$ pair...

The rumor that the FED will do a 'surprise cut' looks not very realistic:
1) In the first place there is a long tradition of the FED sitting on her hands at this phase of the US eclection cycle.
2) All those 'providing liquidity' programs from the FED (like the money auctions or the bond auctions for the primary dealers) did nothing for the spreads. Why should a 25 basis point cut do?

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About the Juncker words: No Europe is right now not on the verge of recession but in the long run I have not observed one detail that clearly says we will prevent stagflation. There is so much commodity induced inflation in the pipeline at the producer/wholesale level that at the time recession sets in, inflation does to.
Hence for Europe the stagflation expectation is still dominant.

For the USA: Look at your own commodity stuff and price indexes on the import/producer/wholes... level. Beside this: The fundamentals are far more against the USA as against Europe.