Dollar Little Changed
Jun 30th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar was marginally lower against the euro. Late Monday, the euro was trading at $1.4078 vs. $1.4068 on Friday.
“The U.S. dollar has started the week a touch firmer, with renewed concerns over the global recovery helping the greenback ahead of a busy week” of economic data, wrote strategists at Brown Brothers Harriman.
With the July 4th weekend ahead, the Labor Department will release the closely-watched tally of non-farm payroll losses a day early, on Thursday. Economists are projecting a net loss of about 325,000 jobs in June. Any strong variance from that figure is likely to have repercussions.
But if there are further indications that the ‘green shoots’ scenario is correct, will that necessarily have a positive effect on the buck? Many doubt it, even though a strengthening economy should portend a stronger greenback.
However, “The past seven years have proven each time U.S. data emerged on the stronger side, global bourses pushed higher-at the expense of the greenback,” said Ashraf Laidi, chief market strategist at CMC Markets.
The scenario seems to be that investors flee to the dollar when they’re concerned about the economy, and abandon it for riskier assets at any sign of an upturn.
In other developments, the dollar got some support after People’s Bank of China Governor Zhou Xiaochuan said that, longer-term, “Our forex reserve policy is always quite stable” and “there are not any sudden changes,” he said over the weekend.
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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.