Dollar Flattened
May 17th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar was slammed against the euro. Late Friday, the euro was trading at $1.5587 vs. $1.5432 on Thursday.
The buck was hit hard by a report from University of Michigan/Reuters which had its U.S. consumer sentiment index for May falling to 59.5 from 62.6 in April. That was the lowest level in 28 years, and fell far short of economists’ projections for a reading of 61.0
The expectations index fell to 51.7 — the lowest level since 1990 — from 53.3 in April, and the current conditions index declined to 71.7 – also the lowest level since 1980 — from 77.0 in April.
The expectations reading tends to reflect future spending, according to Ian Shepherdson, chief economist for High Frequency Economics. He expects a decline of 1% in on-year real consumption by the summer if these levels are sustained.
“In short, there is not so much as a sniff of a hint of recovery here; the data continue to deteriorate,” Shepherdson wrote. “Gas and food prices are the biggest drivers of inflation expectations, so don’t expect a peak until late summer.”
The index data overrode Commerce Department data showing that housing starts rose to a seasonally adjusted annual rate of 1.032 million in April, well above the 939,000 that economists had been anticipating.
Source: Dollar Flattened
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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.