Dollar Continues to Squash Euro
Sep 5th, 2008 | By Doug Casey | Category: Financial News, US Dollar & Forex TradingIn the currency market, the dollar’s assault on the euro continued. Late Thursday, the euro was trading at $1.4326 vs. $1.4508 on Wednesday. What’s happening seems less a rally on the part of the buck as it is a complete deterioration of the common currency.
Yesterday, the European Central Bank left its key rate steady at 4.25%, as had been widely expected.
In the accompanying rhetoric, ECB President Jean-Claude Trichet said the euro-zone economy is “currently experiencing an episode of weak activity characterized by high commodity prices weighing on consumer confidence and demand, as well as by dampened investment growth.”
“Trichet maintained his unambiguously hawkish language on inflation, but markets are largely focusing on the ECB’s growth downgrades for the eurozone,” wrote Ashraf Laidi, of CMC Markets US.
“This bolsters the possibility of an eventual ECB easing” in the second half of 2009, Laidi added.
The buck was also helped when the Institute for Supply Management said services businesses managed some growth in August. Its index on the non-manufacturing sector rose to 50.6, from 49.5 in July, inching past 50, the dividing line between expansion and contraction.
But on the jobs front, the Labor Department said jobless claims rose last week to a seasonally adjusted 444,000, up 15,000 from the prior week, where analysts had expected a slight drop. And the ADP index had private-sector employment declining by 33,000 in August.
Source: Dollar continues to squash euro - Advances despite weak jobs data.
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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.