Dollar Rallies Again
Jun 14th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar rallied again against the euro. Late Friday, the euro was trading at $1.5383 vs. $1.5421 on Thursday.
The government’s efforts to support the buck are obviously bearing fruit, as the currency posted its best one-week gain vs. the euro since August 2003.
The dollar got another boost when the Labor Department said that U.S. consumer prices rose 0.6% in May, the most in six months. Economists had been projecting only a 0.5% gain. Core CPI, excluding energy and food for those who neither drive nor eat, was up 0.2%, in line with expectations.
The hefty CPI growth raises the spectre of inflation, which could cause the Fed to raise interest rates, which benefits the US currency.
Meanwhile, consumers continue to grow gloomier. The consumer-sentiment index fell to 56.7 from 59.8 in May, according to the University of Michigan/Reuters.
More important for the buck, “The market believes the Fed has changed its focus,” said Marc Chandler, of Brown Brothers Harriman. “It’s no longer concerned about risks for the financial system or downside risks for the economy, but about inflation. It’s encouraging people to adjust positions in favor of the dollar.”
Market watchers are keeping a close eye on Osaka, Japan, where finance ministers from the G8 nations — Canada, France, Germany, Great Britain, Italy, Japan, Russia and the United States — are meeting, with inflation on their agenda.
Source: Dollar Rallies Again
Advertisement
They've led you to believe that investors who want outsized gains must take on ridiculous risks.
Click here to learn how a Small One-Time Investment Could Grow Until It's Larger Than All of Your Other Investments Combined.
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.