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  • Fed brings rates down to near zero...

    * The Fed fires its last bullet... * Euro breaks back above $1.40... * AUD and NZD rally... * Happy Birthday Jen... ** Fed brings rates down to near zero... Good day... The 'noise' from the street which I wrote about yesterday turned out to be correct, as the FOMC cut 75 basis points to put the Fed Funds target at .25%. The US now has the lowest interest rates in the industrialized world, even below those in Japan. The dollar lost ground quickly after the announcement and continued to fall overnight to a 13 year low vs the yen and the weakest vs. the Euro in 4 months. With both Chuck and Frank out of the office, I fielded the calls from reporters after the FOMC cut, and the most popular question asked was what the near zero interest rates would mean for the man on the street. Well it was great news for those on Wall Street, but I told the reporters that the rate cut really wouldn't have much of an impact on US consumers. After all, interest rates at 1% weren't stimulating the banks to start lending so why would .25% rates cause any change?...
  • Waiting on the FOMC meeting...

    * FOMC to cut further... * Bernanke turns his back on inflation... * Kiwi and Australia rally... * Gold continues to shine... ** Waiting on the FOMC meeting... Good day...and welcome to another week, hopefully the currency markets can continue their assault on the dollar which began a few weeks ago. The dollar index peaked back on November 21, and with the exception of a few days around the beginning of December, the greenback has consistently fallen vs. most of the major currencies. Friday was no exception, and the dollar continued to give back gains over the weekend with the Euro climbing back over $1.35 for the first time in two months....
  • Fed floods the markets with US$...

    * Bernanke gets help opening the spigot... * Euro and Pound rally... * Yen to continue to benefit from carry reversals...* Aussie $ rallies... ** Fed floods the markets with US$... Good day...and happy Columbus day! This is an official bank holiday here in the states, so all of the banks are closed, but the stock markets are open. We will have a half day here on the desk to try and catch up with all of the work which has been piling up the past few weeks. The phones are turned off, since it is an official bank holiday, but we will be checking messages and try to get back to everyone as quickly as possible. It is a very unusual holiday, as the banks are all closed with no funds transfers possible, but the stock markets are open. Currency desks are lightly staffed, so we will have to really work to get the trades done this morning. These strange holidays usually can lead to some real market volatility, and with today will probably be another rollercoaster. In an all out effort to ease the credit freeze, the Federal Reserve recruited help from the ECB, Bank of England, and the Swiss central bank to flood the market with US$. These central banks will auction unlimited dollar funds with maturities of seven days, 28 days, and 84 days at a fixed interest rate. This move is unprecedented, as all previous dollar swaps were capped at a maximum amount while these auctions will be for unlimited funds....
  • A Perfect Storm...

    * The euro runs into a summer storm... * Plosser wants higher rates... Yeah, right! * Aussie dollar strength to return... * Canadian inflation pops higher than expected! ** A Perfect Storm... Good day... And a Wonderful Wednesday to you! A great day yesterday, as I was able to meet up with old friends, readers, and well wishers... So many people were just glad to see me here! I told them it was good to be seen! Looks like the oil rigs dodged a bullet with Dolly in the Gulf Coast, and that's a good thing! But Dolly will still hit South Padre Island today, please keep that in your thoughts today... Well... You know how I explained on a couple of occasions in the past couple of weeks, a Perfect Storm for the dollar? Well, those never materialized due to a number of reasons... Yesterday, we finally got that Perfect Storm, but it wasn't for the dollar... You know those Mid-Western summer storms, when in the middle of the day, it turns pitch-black, and the trees all begin bowing from the wind, and then the rain comes down hard? Well, that's much like what happened yesterday with the euro... Here's the skinny......
  • More Losses!

    * Currency rally runs into profit taking... * Mortgage related losses continue to mount... * Taking risk... Just seems stupid right now... * Canadian Retail Sales post a gain... ** More Losses! Good day... And a Terrific Tuesday to you! It was a long day of travel for yours truly, who saw two gate changes and two plane changes along with 1.5 hours of delay... I ran into a reader on the plane, that said, Hey! Aren't you Chuck Butler? I could see all the people sitting around me thinking that they should know Chuck Butler, he must be a celebrity! HA! Little did they know, it's just little Ole me, the Pfennig writer! Well... The currencies had a good day VS the dollar, as the euro was able to gain well into the 1.59 handle... Part of my presentation to the main stage crowd tomorrow (900+) is going to ask the question... Where are all those people that claimed the weak dollar trend was over last month when the Fed stated they were going to be inflation fighters? They are no-where to be found! That's where! I recall that even a big name guy at the Royal Bank of Canada, flatly stated the weak dollar trend was over... Where have all the naysayers gone? Long time passing......
  • FOMC Minutes Point To Problems...

    * Questioning the Fed's moves... * Euros slow down... * Aussie hits 25-year high... * Oil hits $135!...