A Big Data Week!
Apr 28th, 2008 | By Chuck Butler | Category: US Dollar & Forex TradingAnd how about that Aussie dollar (AUD)? It is knock, knock, knocking on Heaven’s door… No wait, it’s knocking of the door of 94-cents again. I read a report the other day that ties China’s demand for coal with Australia’s ability to export it to them. China depends on coal for 70% of its energy source, and their demand just continues to grow. Australia, which is the biggest exporter of coal in the world, is sitting pretty. I’ve said this over and over again the past five years, and that is… China’s growth, and its need for the commodities that Australia is rich with, will keep both commodity prices and the Aussie dollar underpinned. I still think that Aussie will trade to parity this year, but that’s just me folks… I could be wrong!
The European Central Bank (ECB) is talking like hawks again, which can’t be good for the dollar! ECB member Liebscher is talking this morning, and focusing on inflation. He’s saying that “inflation will stay higher longer than expected” and that “only the IMF sees room for the ECB to lower rates” and that “the ECB can’t be complacent on inflation”.
WOW! Wouldn’t it be nice to see our own Big Ben talk tough about inflation like that, instead of hiding behind the stupid CPI report and claiming that we have no real risks with inflation?
Anyway… That’s all good stuff for the euro…
Pound sterling (GBP) continues to hang on. I’m very surprised by the performance of the pound… But then, even with cutting rates and being in a rate cut cycle, interest rates are still at a huge positive differential to most of the world. Me? I’m just pointing out the surprising performance… I don’t think we’ll see pound sterling getting’ jiggy with it any time soon.
Carry trades are hot and heavy again. That means yen and francs (CHF) are on the hot seat and getting sold short again. UGH! Just when we thought that was all over! It certainly looks like these are buying opportunities again, eh? Could be… Maybe… Who knows for sure? All I can say is that they are certainly cheaper levels to buy than last week!
Currencies today 4/28/08: A$ .9395, kiwi .7875, C$ .9880, euro 1.5660, sterling 1.9885, Swiss .9675, ISK 73.25, rand 7.5350, krone 5.0970, SEK 5.9775, forint 161.30, zloty 2.19, koruna 16.08, yen 104.40, baht 31.65, sing 1.3620, HKD 7.7890, INR 40.15, China 7.00, pesos 10.44, BRL 1.6660, dollar index 72.55, Oil $119, Silver $16.94, and Gold… $891.65
That’s it for today… I’m running late today. Mary Owens is here, Mike is here, Kristin just walked in. OH MY! What’s going on here? Guess I’ll have to start even earlier tomorrow! Big data week, so strap yourself in and keep your arms and legs inside the vehicle at all times! My little buddy Alex’s baseball game was a washout on Friday night. They got to play one inning before the deluge came. More rain is expected today… April Showers is bang on this year! Well… Since everyone’s arriving, I guess I had better hit the “send button”. I hope you have a Marvelous Monday and Wonderful Week!
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Chuck Butler, is the author of The Daily Pfennig, which is republished at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications.
