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

Euro Breaks to the Upside

My understanding is printing money is not just a US phenomenon, but many countries are printing more money. It appears the globe is awash in currency.

I have to say the currency charts present unusual opportunity with long trends up and down.GI

The Dollar as a Funding Currency

THE US dollar will only appreciate when the universe of currency traders see value from better economic numbers, rise in employment, increased GDP, equivalent rise in personal consumption, rise in inventory numbers, decrease in current account deficit, better numbers in the real estate industry etc. Obviously, this is not going to happen overnight . 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

Is U.S. Dollar Carry Trade Replacing the One in Japanese Yen?

The current FED rate appears to be the driver behind this carry trade. Oddly enough, this creates demand for the US dollar but ultimately drives it lower as interest rate differentials become the primary goal at redemption. The net return appears to ward off the depreciating dollar.

How Bad Is the Dollar's Fall?

I think the most recent rise in the dollar (five cents against the euro) was FED action. This is the first time they lowered the rate with out increasing the money supply. Typically,lowering the rate makes the dollar weaker against the euro based on interest rate preference,but the move was counterintuitive. I can see nothing in the near future that supports the dollar and I expect it to retrace lower considering the fundamentals coming down the pike.

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.

The Dollar Should Double-Dip Against The Yen

Today, the first big default occured with BEAR STEARNS on the verge of insolvency. Thornburg and Carlysle are showing signs of inslvency as well. The foreclosure rate is spiraling and unsecured credit payment defaults are on the rise. Query, of what value are FED RATE cuts if no one is lending? How many more institutions have to fail before we realise not only are we in recession, but verging on depression. I fear the middle class is about to come on hard times and investing in the right asset class is more critical now than at any period I remember in my life, including previous recessions. I was born in 46. I would not listen to any eternal optimist because of the lack of visibilty of impending writedowns which has much more time to reveal themselves. If you ever felt bad about a losing trade, its nothing compared to what the professionals have done to our country.

5 Reasons Why the U.S. Dollar Will Weaken Further

I dont see global meltdown anytime soon. The growth rate in BRIC nations has a long way to run. While exports to the USA may slow as the US tries to overcome the destruction of its consumer, the ability of these economies to become self sustaining without our consumer contribution is the issue.

5 Reasons Why the U.S. Dollar Will Weaken Further

I see fed policy as supporting the U.S. banking system which is currently in crisis from subprime and other unsecured lending policies. When the foreclosure rate tapers off, and the builders supply of unsold homes evaporates,then the low fed rates will kick in to encourage stability in the housing market, the banks main source of profit from secured loans. Until these events occur,the dollar is in for more downside risk.