elef Posted April 6, 2007 Report Share Posted April 6, 2007 The Nation Today Link Dollar pauses near two-year low against euro TOKYO - The dollar steadied close to a two-year low against the euro in Asian trade Friday as players traders took to the sidelines ahead of keenly awaited US jobs data, dealers said. The euro inched down to 1.3425 dollars in early Tokyo trade from 1.3427 in New York late Thursday, when it had hit 1.3441 dollars, the highest level since March 2005. The euro was unchanged at 159.42 yen, while the dollar edged up to 118.77 yen from 118.71. Dealers said trading was quiet with US, European and many Asian financial markets closed Friday, even though Washington releases its nonfarm payrolls report, seen as a critical economic indicator on the world's largest economy. "It is difficult to take positions ahead of the release of the US payrolls data, which is now a key factor ... for financial markets," Kosuke Hanao, dealer of forex sales at HSBC. "Some predict stronger figures but we really need to see what they are," Hanao said. Non-farm payrolls are expected to show a rise of about 135,000 in March after a 97,000 gain in February, according to Wall Street forecasts. Investors are paying close attention to the jobs data following a slew of weak US figures which have fanned jitters over the pace of the US economic slowdown, dealers said. The Institute of Supply Management's non-manufacturing index fell in March, while the market had expected it to rise. The release raised concerns that the US service sector could now face trouble along with manufacturing. The euro on the other hand has been buoyed in recent weeks by positive economic news and favorable interest rate differentials, analysts said. "In fact, the euro is near reigning supreme in the foreign exchange market as holding it is seen as a way to avoid risks," Hanao said. "Sentiment for euro-buying is expected to remain strong for the time being." The European Central Bank raised its key interest rate to a five-and-a-half-year high of 3.75 percent last month and has signalled that a further rise is possible soon. In contrast, the US central bank appeared to open the door to a cut in interest rates last month when it kept rates unchanged at 5.25 percent. Agence France-Presse --------------- Baht/$ 34.89/92 Bid/Ask Bangkok Post Link to comment Share on other sites More sharing options...
Denarius Posted April 6, 2007 Report Share Posted April 6, 2007 US dollar is close to critical support levels. If it falls below those, look out below. Link to comment Share on other sites More sharing options...
Old Hippie Posted April 6, 2007 Report Share Posted April 6, 2007 Given that we owe tons to China and others, shouldn't the rest of the world be shitting along with the rest of us? I mean, I'd think if the US economy collapses any further, the rest of the world might feel/take some fall out no? Link to comment Share on other sites More sharing options...
Denarius Posted April 6, 2007 Report Share Posted April 6, 2007 If it turns into a mad scrabble out of US dollars then yes the world is in big trouble, but probably just in the short term. No one wants this. Countries are slowly moving out of their dollar positions. The US dollar has lost 95% of its purchasing power since 1913 (when the Fed was created), with 70% since 1971 (when Nixon closed the gold window). The Fed wants inflation (actually it causes inflation), and does not care about a lower dollar, it just does not want it happening quickly. If other countries do not keep up with the US in their rate of printing of currencies then their currencies will increase against the dollar. Link to comment Share on other sites More sharing options...
Old Hippie Posted April 7, 2007 Report Share Posted April 7, 2007 Some here are arguing the dollar is being manipulated down for debt purposes, and to help US Exports...your thoughts? Link to comment Share on other sites More sharing options...
cavanami Posted April 7, 2007 Report Share Posted April 7, 2007 The USA gov likes the dollar to be weak, this way the USA exports are "cheap" for other countries. Also, folks from the EU can be tourist in the USA at bargin prices! With the dollar weak, China is somewhat screwed in that they have to accept a weak dollar for their exports. If China raised the price of their exports, then it is no longer profitable to buy things from China and just maybe, the USA industries will wake up and start to make things in the USA again!!! Bottom line, all smoke and mirrors being controlled by the big dogs, which ain't you and me. Link to comment Share on other sites More sharing options...
Denarius Posted April 7, 2007 Report Share Posted April 7, 2007 Well yes, there is manipulation, but it is in gold. The central banks' manipulation of the price of gold makes the dollar look better than it should be. Really the dollar should be much worse than it is. The Federal Reserve's printing of dollars is necessary to cover current account obligations. These extra dollars should lower the value of all dollars because there are more of them around. There exists some unfair advantage about who gets to use these newly created dollars first before their value declines, but that is another story. Interest rates and the Open Market Committee are ways for the fed to influence the value of the dollar. The Fed also stopped publishing M3, to hide how fast they are printing money. It can be reconstructed however and the current rate is over 10% per year. This is the true inflation rate. The best way to influence market opinion though is through the perception of the value of gold. Central banks have been leasing gold, selling their gold reserves, and short selling gold at critical points to control the advance in the price of gold. If all these things had not been done the gold price would be much higher and it would be obvious how much the dollar had depreciated in value relative to gold. The good news is that central banks are running out of their gold reserves and they cannot continue this much longer. Ironically the Russian, Indian and Chinese central banks have been buying gold and silver. When this is over they will have the world's strongest currencies. You can hope that there is still gold in Fort Knox. It has not been allowed to be audited since 1950. The current fiat money system of the Fed is contrary to the US Constitution, Section 10. Section 10: [color:blue]No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;[/color] pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress. No State shall, without the Consent of Congress, lay any duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay. Link to comment Share on other sites More sharing options...
Denarius Posted April 7, 2007 Report Share Posted April 7, 2007 China has $1 trillion to fight a US trade war: Mark Gilbert Posted online: Tuesday, April 03, 2007 at 0000 hours IST APR 2: The US has been standing on the ledge for a while now, scanning the sidewalk of recession many levels below. Its decision to slap tariffs on Chinese imports nudges the worldâ??s biggest economy closer to the precipice. While the idea of a trade war seems like a musty 19th-century relic, reeking of exotic spices and wrapped in fabulous colored cloth, the numbers underlying the current dispute are of a magnitude only possible in the go-go, globalizing 21st century. The US has a $233 billion deficit with China, which in turn has lent about $400 billion to the US government by investing a chunk of its $1 trillion of currency reserves in Treasury securities. That gives China a hefty stick with which to beat back the US protectionism. The dollar is swooning at the prospect of China offloading some of its stockpile of Treasuries as swift retaliation against the accusation of being a non-market economy and unfairly subsidising its exporters. The currency nudged 1.34 per euro, nearing a two-year low, when the duties were announced March 30 by the commerce department. When strategists and economists scanned their crystal balls in recent years for flashpoints that Chinaâ??s newfound appetite for overseas adventures might ignite, the most likely seemed to be the Asian nationâ??s need for energy sources or its political claims to Taiwan. Stoking a Fire Instead, it turns out that glossy paper of the kind used to print magazines is the kindling for what may turn out to be a devastating financial battle. Wrangling over the $224 million of coated paper China exported to the US in 2006, though, is just an initial skirmish in what may be a protracted battle.Every lobbyist in Washington, from those representing steelmakers to the ones pretending that the US would still have a healthy auto industry if it werenâ??t for the undervalued yuan, will be lining up outside the office of commerce secretary Carlos Gutierrez to demand special treatment for their clients. If you read too much research about the pros and cons of allowing trade and current-account gaps to swell unchecked, your head will begin to hurt. The blogs of those who spend too much time hanging around the Internet water coolers are awash with arguments about why the various U.S. shortfalls threaten to unleash financial Armageddon on the worldâ??s largest economy and its currency. There are just as many eloquent claims explaining why deficits are irrelevant. Dismal Dollar Run a chart tracking the change in the US currencyâ??s value in recent years, however, and it quickly becomes clear that the dollar is in lengthy, sustained decline - whether as a consequence of those so-called global imbalances, or as traders and investors participate in a market-led, invisible-hand solution to the problem via the currency markets.The dollar has lost about 9% of its value in the past year against the European currency, and almost 35% in the past five years. On a trade-weighted basis, the dollarâ??s index value is down to about 81, from as high as 112 five years ago. Figures last week showed the worldâ??s central banks have the lowest level of the US currency in their foreign-exchange reserves since at least 1999. Dollar holdings dropped to 64.7% in the fourth quarter, according to the International Monetary Fund, down from 65.8% in the previous quarter and from as high as 72.6% in mid-2001. The euro is at its most popular since its 1999 introduction, with a share of 25.8%. Various countries have threatened to try to change the denomination of the worldâ??s energy resources, which would further weaken the U.S. currency. Iran, for example, plans to end all sales of oil in dollars, Reuters cited Iranian Central Bank Governor Ebrahim Sheibany as saying on March 30. Agriculture Subsidies The US can hardly claim to be a paragon of free trade. In his book ``Making Globalization Work,â??â?? for example, Nobel Prize- winning economist Joseph Stiglitz says there are 25,000 US cotton farmers enjoying $4 billion of annual subsidies. Without those government payments, ``it would not pay for the United States to produce cotton; with them, the US is the worldâ??s largest cotton exporter,â??â?? he writes. â??Bloomberg Link to comment Share on other sites More sharing options...
OCgringo Posted April 7, 2007 Report Share Posted April 7, 2007 the US$ has been around 1.25 for 4 years against the Euro within 5% of that number up or down, most of the time Currancy traders love to play doomsday senerios to make market movements , Its not going to happen ! I w ould not sell US$ or buy Euros thinking I was going to make money , the people that make money are collecting their commisions from you paying to trade currancies OC Link to comment Share on other sites More sharing options...
Old Hippie Posted April 7, 2007 Report Share Posted April 7, 2007 OK so next question...how many times has this all hapened before, and what was the outcome? Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.