Dollar Advances vs. Euro – Central Banker Hints at Rate Hikes
May 30th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar firmed for a third straight day against the euro. Late Thursday, the euro was trading at $1.5501 vs. $1.564 on Wednesday.
The direction of interest rates was on everyone’s mind. Dallas Federal Reserve President Richard Fisher, who has voted against the Fed’s three most-recent rate cuts, hinted in a Wednesday speech that the central bank is done cutting interest rates and is prepared to raise them.
“If inflationary developments and, more important, inflation expectations continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario,” Fisher said.
“Those remarks made it more evident that the Fed’s propensity to take the overnight funds rate below 2% [is] smaller and ever smaller,” wrote Dennis Gartman, publisher of the Gartman Letter.
The job market continues to be difficult. The Labor Department reported that initial claims for state unemployment benefits rose 4,000 to 372,000 in the week ended May 24. While, according to Bear Stearns economists, claims haven’t moved into “recession territory … they continue to bounce around close to the 375,000 level that we believe is consistent with mildly recessionary conditions.”
Source: Dollar Advances vs. Euro – Central Banker Hints at Rate Hikes
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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.