Dollar Tanks vs. Euro
Jul 12th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar plunged against the euro. Late Friday, the euro was trading at $1.5931 vs. $1.5729 on Thursday.
“For the greenback, politics is trumping economics as fear that Israel may attack oil-rich Iran makes traders jittery,” said Kathy Lien, of DailyFX.com.
As traders fled to safety, “even the better than expected U.S. trade balance numbers could not help the dollar, because the sentiment in the market is very dollar bearish,” she added. The trade deficit unexpectedly narrowed in May to $59.8 billion from $60.9 billion.
Financial markets remain in turmoil. Friday’s New York Times said that Bush administration officials have weighed the possibility of a government takeover of Fannie Mae (NYSE:FNM) or Freddie Mac (NYSE:FRE), or both, if the situation worsens.
But Treasury Secretary Henry Paulson refused to give that credence, stating that the Treasury is “supporting Fannie Mae and Freddie Mac in their current form.”
Separately, Fed Chair Bernanke assured Fannie and Freddie that they would be welcome to show up at the discount window, if need be, according to reports. The Fed, formerly the lender of last resort for commercial banks, opened up to investment banks earlier this year, and now will apparently support government-sponsored enterprises (so-called GSEs), as well.
Source: Dollar Tanks vs. Euro
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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.