Dollar Gains on Euro
Jun 25th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar gained ground on the euro. Late Wednesday, the euro was trading at $1.3926 vs. $1.4089 on Tuesday.
The news of the day was, of course, the FOMC meeting, at which the Fed did the expected and left interest rates alone. The committee’s accompanying statement on the economy was upbeat, saying that the downturn is slowing and deflation is no longer a big threat. Inflation, it said, is likely to “remain subdued for some time.”
In addition, it did not announce any changes in its current plans to buy Treasurys and mortgage-backed assets to lower the interest rates and boost the economy.
Among the day’s hard numbers, the Commerce Department announced a better-than-expected 1.8% increase in durable-goods orders in May. Economists had been forecasting a 0.4% drop.
However, shipments of durable goods fell 2.1% in May. They are now down 19.3% in the first five months of the year compared with a year earlier, and have fallen for ten consecutive months.
Separately, Commerce said that sales of new homes dropped 0.6% to a seasonally adjusted annual rate of 342,000 in May from a downwardly revised 344,000 in April. Seasonally adjusted sales have been essentially flat since January, when they dropped to a postwar record low of 329,000. The report was weaker than expected, with economists projecting a slight increase to 363,000 annualized.
The report also said that sales are down 32.8% in the past year; inventories of unsold homes fell 2.3% in May to 292,000, representing a 10.2-month supply at the May sales rate; and median sales prices rose 4.2% in May, to $221,600, the first month-over-month increase since December.
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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.