Dollar Strengthens
Jun 23rd, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar rallied against the euro. Late Monday, the euro was trading at $1.3864 vs. $1.3952 on Friday.
Traders fled to the perceived safe haven of the USD after the World Bank predicted yesterday that the global economy will shrink 2.9% this year. That’s a much steeper drop than the 1.7% contraction it projected in March.
The bank warned that international capital will continue to flow out of developing nations, with international capital flows projected to fall to $363 billion in 2009 from their peak of $1.2 trillion in 2007.
Eyes are now on the FOMC, which meets on Wednesday. “The debate now is how do we take back the quantitative easing without being disruptive” to a recovery, said Dan Janis, a global fixed-income portfolio manager at MFC Global.
The market completely ignored a stronger-than-expected rise in Germany’s closely-watched monthly business climate index from the Munich-based Ifo Institute.
The index rose to 85.9 in June from a revised reading of 84.3 in May, whereas economists had been expecting a more modest rise to 85.3.
It was, however, good news, as the survey results “confirm that the German economy is gradually stabilizing,” said Ifo President Hans-Werner Sinn.
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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.