Dollar Bludgeons Euro
Apr 28th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar pounded the euro. Late Monday, the euro was trading at $1.3039 vs. $1.3247 on Friday.
The main driver was the “growing concern that the Mexican swine flu could turn into a global pandemic,” said Adam Cole, global head of foreign exchange strategy at RBC Capital Markets.
With Mexico at the epicenter of the flu scare, it was no surprise that the peso suffered the most against the buck yesterday, dropping 4.7%.
“Clearly there’s a lot of uncertainty at play right now,” said James Hughes, market analyst at CMC Markets, and “any change in guidance over the outbreak from the likes of the WHO will be closely watched.”
Elsewhere, “We need a new resolution regime for large financial institutions,” said Sheila Bair, chairwoman of the Federal Deposit Insurance Corp. “Creating such a resolution authority would be very bold, but needed.”
The authority would be responsible for providing funding to an imploding institution so it could pay off its counterparties and creditors, and Bair wants lawmakers to hand the job to the FDIC, but granted that it could also go to the Fed or some newly-minted entity.
And GM saw its shares surge after the automaker asked its bondholders to exchange $27 billion in debt for equity or risk taking an even harder hit in bankruptcy court.
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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.