Dollar, Little Changed
Apr 15th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingRetail sales get small bounce. But G7 expresses concern over dollar’s weakness. In the currency market, the dollar gained early against the euro, but then lost it all. Late Monday, the euro was trading at $1.5803 vs. $1.5809 on Friday.
Dollar apologists could not have been pleased with the currency’s performance after a little good news. The Commerce Department reported that retail sales showed some improvement in March, rising 0.2%. Economists had been predicting a 0.1% decline.
Commerce also reported that inventories rose 0.6% in February, with gains in all three subcategories: the retail, factory and wholesale sectors. As inventory builds surprise to the upside, that may be enough to keep first quarter growth above zero, said economists at Lehman Brothers.
The G7 finance ministers issued their usual communiqué after meeting over the weekend, and French Finance Minister Christine Lagarde said yesterday that the foreign exchange market doesn’t fully understand the magnitude of their language shift on currencies.
“I’m not surprised [if] it will take a few more hours” for the meaning to sink in, Lagarde said. “For the first time since 2000, we are collectively expressing concern. We all together believe the level of volatility and the discrepancy between where a currency lies relative to the fundamentals of the economy are just not right at the moment.”
Pressed on whether the G7 would be concerned if the dollar moved even slowly lower versus the euro, Lagarde replied, “Yes.”
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.