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  • Game off for risk trades...

    In This Issue..

    * Dollar hits 3 month high...
    * Norges bank raises .25%...
    * Fed repeats call to keep rates low...
    * Inflation in India rises...

    Good day...And welcome to Thursday. Chuck started his Christmas vacation, so I have the honor of bringing you the daily missive for the next week or so. The dollar continued to gain strength throughout the day as investors waited on news from the FOMC. Overnight, Greece sustained another rate cut, this time by S&P, which caused investors to move back toward the 'safety' of the US$. The news caused the dollar to rally to a 3 month high vs. the Euro and post gains across the board. The currency markets are becoming a bit volatile again, and much of this volatility can be linked back to the return of a transaction which dominated currency markets over the past decade....
  • A Currency Bounce...

    * U.S. stocks soar! * Currencies rally! * Consumer Confidence at an all-time low! * Getting off the bench! ** A Currency Bounce... Good day... And a Wonderful Wednesday to you! The fall chill has really set in here as witnessed by my need to throw on a jacket and my Missouri Tigers baseball cap each morning! When you are basically bald like me, the cold air is not a friend to you, thus the need for a baseball cap from now until late spring! Well... The trading theme remained in place yesterday, but this time it was reversed. For those of you new to class, or any of you who have been playing horse hooky, the trading theme that has gripped the markets since August is: The deeper, darker, and more dangerous the U.S. economy and financial meltdown, including the credit market's locked status, the dollar gets bought... If there is any sign of light to all this mess, the dollar gets sold, for whenever the markets get their minds off the mess, they are reminded of awful fundamentals for the dollar....
  • Here we go again...

    * Here we go again... * US numbers show further slowdown... * Norway cuts rates... * Switzerland moves to shore up UBS... ** Here we go again... Good day...The dollar rallied and the equity markets plunged yesterday as investors again pulled their money away from the markets. As we have seen over the past several weeks, when investors get worried about the state of the global economy, they rush back into cash, and in the world of cash the US$ is still king. Chuck has been talking about this trading pattern during his FX University presentations, and I'll start this morning's Pfennig off with his thoughts from Philadelphia, where he is hosting another day of FXU: Here we go again! The recession trap door gets sprung under the stock market, and things begin to look really bad in the U.S. again, and guess what? The dollar rallies... This just plays the trading theme over and over again... And Yen? It's back below 100! Risk gets taken out, and whatever carry trades that were brave enough to go back on after Monday, have been wiped out! Wiped out like the rally in Aussie dollars, which had rallied to +70-cents after Monday... And lost 5-cents today......