Buck Gains On The Euro
Posted on: Feb 2nd, 2009 | By Doug Casey | Filed under Financial News
In the currency market, the dollar moved higher against the euro. Late Friday, the euro was trading at $1.2805 vs. $1.2952 on Thursday.
“The main driver in foreign exchange remains overall investor sentiment, with stock market movements as the primary barometer of risk appetites. When stocks are up and sentiment is positive, the U.S. dollar, the Japanese yen and gold are typically sold, and when shares start falling, the U.S. dollar, Japanese yen and gold are all bought,” wrote Brian Dolan, of Gain Capital.
“The flip side of strength in the U.S. dollar is weakness in the euro and there appears to be growing momentum to more aggressively test the downside of the European single currency,” Dolan added.
And, well, the data yesterday were not so hot, either. The Commerce Department reported that the U.S. economy contracted at a 3.8% seasonally-adjusted annual rate in the fourth quarter of 2008, marking the worst reading since 1982.
Analysts pointed out that the GDP reading would have been even worse if not for the fact that the government counts an unwanted buildup of goods on store shelves as growth. Minus that input, the economy contracted at a 5.1% pace.
Separately, the University of Michigan/Reuters consumer sentiment index was up in January to a final reading of 61.2 from 60.1 in late December. Still, that failed to meet analysts’ expectations for a rise to 61.5.
Source: Buck Gains On The Euro
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.