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  • Brazil To Benefit From New Carry Trade?

    In This Issue..

    * The dollar fights back...
    * Government deficit spending deep sixes us...
    * Brazilian rate hikes on the table...
    * Round Two of the PPT thoughts...

    Good day... And a Thunderin' Thursday to you! Well... It's not really Thunderin' outside, but it is snowing, with about 3-4 inches on the ground already, and the snow coming down so thick that seeing is difficult. I made it here, but then I drive a car that was made to go in stuff like this! Pretty soon, my phone will begin to ring, with colleagues calling to ask me how the roads were...

    Well... We had more probing higher in the non-dollar currencies only to see the gains wipe away at the end of the day yesterday. Still, as I told a radio audience in Oregon yesterday, traders, investors, etc. still believe the euro is worth more than the dollar by quite a bit... Gold also gave back some gains overnight......
  • Housing stats show more rot on the housing vine....

    * US$ continues to be propped up... * SEK moves up vs. the US$... * Japanese yen falls.... * Gold prices come down ... ** Housing stats show more rot on the housing vine.... It has been a while since Chuck turned over the reigns of the Pfennig to me, so I'm a bit out of practice. But there was a lot of movement in the currency markets over the last 24 hours, giving me plenty of Pfennig fodder. I'll get right to it. The 'Safe Haven' status of the US$ continued to prop it up yesterday as bad housing data in the US scared investors. Sales of previously owned homes fell 5.3% in January, after rising slightly last month. And even worse for US homeowners, the median price of a home fell to $170,300, down nearly 26% from its peak in July 2006. These numbers reflect a worsening housing market which will weigh on the US economy through most of 2009. The inventory of unsold homes did fall, but still stands at 3.6 million. At the current rate of sales, it would take 9.6 months to exhaust the excess supply of homes. And this is assuming no more homes come into the market. The housing downturn will continue well into 2010, and will likely keep the US economy in the doldrums....