Dollar Prolongs its Slide
May 7th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar slipped some more against the euro. Late Tuesday, the euro was trading at $1.5525 vs. $1.5491 on Monday.
The buck declined even more against the Canadian loonie, which appreciated better than 1% against its neighbor currency. Canada’s dollar is perceived as backed by more in the way of natural resources and therefore my be sounder than the U.S. version.
Some grim earnings reports helped deflate the buck. First, Fannie Mae reported a much wider-than-expected first-quarter loss of $2.2 billion, as credit-related problems hit it hard. The mortgage giant also said it needs to raise $6 billion in new capital.
Then, D. R. Horton, one of the nation’s largest home builders, reported a $1.3 billion quarterly loss as housing weakness and turmoil in mortgage markets continued to hammer its bottom line.
Additionally, Big Ben Bernanke made the news when in a speech he issued a warning that increasing home foreclosures could further harm the economy. Um, could?
Assessing the economic impact of foreclosures, Bernanke said that, “It is important to recognize that the costs of foreclosure may extend well beyond those borne directly by the borrower and the lender.” Wow, didn’t know that.
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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.