Dollar Whacks The Euro
Jan 6th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar rallied strongly against the euro in its opening shot across the bow for 2009. Late Monday, the euro was trading at $1.3588 vs. $1.3869 on Friday.
“[The] dollar was boosted in part by ongoing talk of a big fiscal package from the incoming Obama administration, and we think gains will be sustained in 2009,” wrote currency strategists at Brown Brothers Harriman.
That government handout is looking as if it might be huge. According to MarketWatch.com, “Obama plans to spend about $775 billion over two years, putting people to work on infrastructure projects and giving aid to states. In all, the tax cuts or breaks would account for about 40% of the value of the stimulus.”
Though the buck put a smackdown on the euro, it lost ground, nearly 1%, vs. the British pound.
“Although the [Bank of England] is expected to cut rates this week, there is more chatter, particularly following last week’s sobering credit conditions survey, about other policy measures by the BoE and the U.K. government to attempt to spur bank lending,” said David Watt, of RBC Capital Markets.
The day’s hard data came from the Commerce Department, which reported that outlays for construction projects in the US fell by a seasonally adjusted annual rate of 0.6% in November. That drop was “surprisingly small,” wrote Mike Englund, chief economist for Action Economics.
Source: Dollar Whacks The 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.