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  • The Euro stays on the move…

    In This Issue..

    * Euro stays on the move...
    * Soros calls for more stimulus spending...
    * Commodity currencies suffer...
    * Cards sweep the Dodgers...

    Good day... And welcome to another week. Chuck is on his way to Vancouver this morning to speak at the big Agora Finanacial Investment Symposium later this week; so I will have the honor of bringing you the Pfennig over the next few days. But fans of Chuck shouldn't get too upset, as he always sends me Pfennig Pfodder from the road. The euro has certainly been on the move lately, and Chuck left me the following before signing off last week:

    Well... Mid-morning last Friday, we saw the rug pulled from under the euro, after the single unit had recovered to 1.30. Yes, the euro traded at 1.30 on Friday morning, but that was before a Consumer Confidence report printed in the U.S. and showed a HUGE drop!...
  • Germany's Merkel gets her way...

    In This Issue..

    * Germany's Merkel gets her way...
    * Confidence in the US ebbs lower...
    * China to stick to renminbi policy...
    * Gold stops sliding...

    Good day, we had another strong day for the dollar yesterday, with the greenback gaining against all of the majors. But overnight, the Asians and then the Europeans sold the dollar and moved money back into the currencies. So after another rollercoaster ride, we are basically right back where we were at this time yesterday morning. These volatile markets are likely to continue, as investors try to figure out if the global economy will recover or if we will slide back into recession. With all of this uncertainty, you would think investors would be moving into 'hard assets': Gold and Silver. But the markets for these two precious metals have been surprisingly quiet this year. More on the metals a bit later, first I will try to figure out these currency markets....
  • The Dollar Rebounds Again...

    In This Issue..

    * Economic data deep sixes currency rally...
    * U.S. Treasury back at the auction window!
    * Yen's rose has faded...
    * Chinese renminbi spikes higher!

    Good day... And a Wonderful Wednesday to you! Not trying to sound like a broken record here, but today is the last Wednesday of 2009... The last 'hump day' and so on... The non-dollar currencies got bushwhacked yesterday by the dollar bulls around mid-day, and there's been no recovery since. The Treasury is back at the auction table, with $32 Billion in 7-year Treasuries for you to buy at the fantabulous yield of.... Drum roll please.... 2.60%! All that and more, so buckle yourself in, and make certain to keep your arms and legs inside the Pfennig at all times during the ride!

    ...
  • Risk aversion returns…

    In This Issue..

    * Risk Aversion returns...
    * Money Multiplier dampens stimulus effects...
    * TIC flows show concern of foreign investors...
    * China back on growth track...

    Good day... Chuck got an early start on a two week hiatus from the desk, so you will be stuck with me writing the Pfennig for the next two weeks. But don't worry, you will still get a small dose of Chuck over the next week as he typically emails me his thoughts while on the road (I call it Pfennig Pfodder). Risk aversion dominated the currency markets overnight, as terrorists set off two separate explosions in Jakarta and investors moved money back into the 'safe havens' of the US$ and Japanese yen.

    Chuck wrote about this move yesterday, believing the bad news regarding CIT would probably cause a risk reversal. But the US stock market shook off the CIT news and rallied higher after a big earnings report by JP Morgan and a somewhat positive statement by Nouriel Roubini. Roubini, the New York University economist who is credited with predicting the financial crisis, said in a speech yesterday that the US economy might be close to the bottom. The stock jockeys took this statement along with the positive earnings reports and ran stocks up. But Roubini later tried to caution these bulls against reading too much into his statement, and reminded everyone that he has not changed his thoughts on a US recovery: 'I continue to see a shallow, below par and below trend recovery.'...