Mr. G

Tuesday FX View: Sour Tone Leaves Both Dollar and Yen Bid

You seem to enjoy analogizing currency and people to food. I hope your not overweight. GI

Thursday FX View: Trichet Offers the U.S. His Sledgehammer

3% GDP increase and 10.2% unemployment. A question arises. What is holding up the US economy? I believe its the global economy and for US stock investors, those companies participating in the world wide economy will do the best. Locally, demand has waned. September inventories were down and this doesnt bode well for the holiday season and one might speculate the consumer has been severally damaged, not only from unemployment but in overall sentiment.

In the longer term, this does not support the dollar. I would speculate the dollar will remain in the downtrend longer term till US consumption picks up. GI

Tuesday FX View: Currency Traders Take a Beating as Dollar Rally Gives Way

The question concerning the Yuan is interesting. The most important point is that the value of any currency is how the universe of traders see it on the spot market, not any true value. For example, for the US to have a strong dollar policy is a worthless statement if the universe of traders do not perceive the dollars fair market value as strong.
A better question is what causes a currency to be perceived as strong? In my opinion, the value of any currency is determined by the set of economic indicators affecting the countries GDP. It is the constant ebb and flow of these indicators that traders perceive at any one time that ultimatley measures a currency value. Said another way, look at currencies as being a stock in a country.

At present China may be artifically depressing its currency to make its exports more competitive on the global export market. Considering Chinas economic growth rate, I believe the universe of traders would see its value higher than its current pegged rate. How much higher is a guess at best, but I would like to watch it trade once unpegged and my position would be long. GI

Tuesday FX View: Currency Traders Take a Beating as Dollar Rally Gives Way

The dollar index recently made a major breakout from its downtrend. Was this a headfake or a signal for future upside movement? The ADP and ISM nonmfg reports do not support the upside, but an unexpected move in the unemployment rate on friday may have a more pronounced affect.
The dollar breakout may have been short covering as the demand for the dollar increases. It seems the US is just bumping along the bottom and if the unemployment rate is flat, I do not expect more upside to the dollar.GI

Monday FX View: A Smoother Start to a Week Has Dealers Mark Down Dollar

Just a technical note. The dollar has broken out of its downtrend since June. It could retrace back to 80 on the index. I think the unemployment indicator this friday could forecast future movement. I would still be on the sidelines in gold and oil. GI

Time To Go Long The Dollar?

As the knives keep dropping and the FED tries to prevent freefall, the dollar will correct in response, but the visibility of risk and failure of similiar institutions like BEAR STEARNS is not clear, and this places a jaundiced light on futher dollar strength. Buyer beware. Why did Bear Stearns and J. p. Morgan rise after buying a bundle of worthless debt? Is there more bad debt to surface. I dont hear any fat ladies singing yet and the markets are fickle depending in their focus.