Thread: USDs sharp turn

On Monday the USD went down, striking its lowest in seven weeks on the euro and seven months on the AUD, as investors got encouraged by slowing U.S. job losses extended diversification into other currencies.

As seen on recent Forex updates, the USD index strike a fresh four-month low, following through on a fall on Friday after data showed the U.S. economy discarded 539,000 jobs in April, fewer than expected and increasing expectations the worst of the economic fall may be ended.

The USD eased 0.2 % to 98.24 JPY. The Euro was stable at 134.21 Yen after temporarily beating a one-month high at 134.80 prior.

The US Dollar gained broadly on Monday after several down sessions towards the end of last week. Investors were digesting the US unemployment report which initially were seen to have come in better than expected, and the results of the stress test which showed that 10 major banks need to raise more capital in order to stave off insolvency. The risk rally that resulted from the seemingly positive numbers last week stalled after HSBC Bank said that while their first quarter profits were up, they would have been down had it not been for new reporting rules which allowed them to exclude certain investments. This brought a reality check to investors who were celebrating the end the recession.

At 11:00PM GMT, the Dollar was up .39% to the Euro to 1.358, down 1.12% to the Japanese Yen to 97.35, up .77% to the British Pound to 1.5114, up 1.4% to the Canadian Dollar to 1.1656, up 1.25% to the Australian Dollar to .7588 and up .4% to the Swiss Franc to 1.1091.

Interesting,

Can you imagine, the dollar moving up on news that unemployment was better than expected at 540K which drove rate to near 9%, sure to be 10% by this months end. If the hundreds of thousands of emplloyees of auto dealers who are about to be unemployed hit the uneployment lines next month, we will be over 10%, then I want to see what dollar does when numbers are worse than expected. lol

With further evidence of foreclosures getting worse than expected, combined with printing presses running at full tilt throwing trillions at economy over past few months, I remain short the dollar, and the hiccup uptick this past couple days happened with no good news for dollar other than it was not worse than expected. That uptic will be wiped out by end of week.

Success to all, Mike

On Wednesday the USD close to a 4 month low on the index at 81.871 And it remained firm on the next day as calculated against 6 major currencies. USD lost 9% against the Euro since early March, but the European currency is now under pressure to break above $1.3740, where resistance from a 38.2 % Fibonacci retracement of its 2008 fall from above $1.60 has blocked its path.

on Friday the USD strengthened as economic releases were positive, the equity markets lowered on the comments of FDIC Chairman Sheila Bair that the heads of some banks may be replaced.

Well, the US Dollar fell on Friday across the board to its lowest level of 2009 after concerns emerged over the US’s “AAA” sovereign credit rating from both Moody’s and Standard and Poor’s. The drop in the Dollar, which was the largest in nearly two months, came after S&P announced they were reviewing the sovereign credit rating of England due to soaring fiscal deficits. With the US running a debt of 1.5 Trillion and a deficit of nearly 12 Trillion, investors feared the US might be next.

Interesting,

When you look at what has happened over the past year, this was inevitable. We saw the dollar starting to collapse late last year, and then Rice was sent to world bank leaders to request they support dollar or the economic collapse would not be contained to U.S. alone. After all, they all have investments in dollar, so it was the last gasp strategy to try and bolster dollar, and it worked.

The dollar regained what it has lost at the end of last year for first couple months of 2009, but sadly, the threats to world banks was simply going to delay the inevitable as we can now clearly see. With China divesting billions in dollar investments not so quietly any longer, how many others will follow, if not are already dumping dollars bracing for this free fall.

When you look at the real problem, as in the supposed good faith in dollar which is all that backs it, I would say few have any faith in U.S. leadership, banks, so where is the good faith at this point? As we have seen, we are now in an economic war, and this is a war we cannot win. Dropping rates to fire sale level, pumping trillions more into the system from thin air, how stupid to our leaders think the world is? Sooner or later you cannot fudge the numbers and the facts are slowly coming out, there is no more bullets in the feds gun.

And as a sidenote, speaking of guns, be prepared, we have all seen gun sales increase since election, so what we are seeing now is a new bill slipping quietly through house which is going to be first step to control, if not eliminate all ammunition which is not registered in new national data bank. If this does not smell of economic meltdown fear, nothing does. If gov. cannot control guns, they will control ammunition, so why are they doing this now? This is a sure sign of good faith fading in gov. and dollar, never mind our banking system, so hang on, these are interesting times.

http://ammunitionaccountability.org/Legislation.htm

The US Dollar index hit a five month Low on Friday after concerns regarding the US’s ability to fund their 1.8 Trillion Dollar budget deficit reemerged. The worries caused the yield on the 10 Year US Treasury Note (T-Note) to rise to its highest level since 2004 and brought the dollar down. Analysts and traders fear that the rising deficit and overall debt load that the US is carrying will force it to inflate the Dollar by printing money and once a program of cognitive inflation is implemented it can be difficult to control. Some US government consultants have argued that a 6% inflation level over a 10 year period will help erase the debt, however once implemented, it can be challenging to limit to a specific level.
The Dollars problems were heightened late in the trading session after word emerged that US automaker General Motors will file for bankruptcy on Monday after it failed to negotiate a settlement with bondholders. Based on its commitments, the US government will take a 70% stake in the carmaker having already invested 20 Billion Dollars.
At the close the Dollar traded down 1.9% to the Japanese Yen to 95.31, down 1.53% to the Sterling to 1.6187, down over 2% to the Canadian Dollar to 1.0909, down 2/15% to the Australian Dollar to .8008, down .16% to the Swiss Franc to 1.0668 and down 2.8% to the New Zealand Dollar to .6403.