The dollar rallies big time! A dollar conspiracy? Bailing out the automakers? Weathering the storm in N.Z.?
And Now… Today’s Pfennig!
In the currency market, the dollar edged higher against the euro. Late Wednesday, the euro was trading at $1.2948 vs. $1.3002 on Tuesday.
Huge trend reversal: Dollar busts, commodities boom… why, and will it last? Rate cuts round the world… U.S. and China slash, Japan considers. U.S. three months away from “official” recession. Two new bailouts: Who’s lining up for help, plus Uncle Sam’s October tab. Denning and Nelson on beating inflation with the right long-haul stock.
The bailout bill has passed the Senate. But US stock markets are still highly volatile in the absence of any concrete deal passing Congress. Where can investors hide in these conditions? Sean Hyman says the answer lies in low-yielding currencies such as the yen and the Swiss franc.
The euro fell to a one-year low versus the dollar as economic concerns about European Union member nations continue to mount. The euro shed 0.6% to trade at $1.394 at 1:40 p.m. in New York yesterday (Thursday). Wednesday, the dollar reached as high as $1.3882, its highest level since Sept. 18, 2007, before dropping slightly to close at $1.3998, according to Bloomberg data.
The dollar continued to rally against the euro yesterday.
It reached its highest level against the euro since January, after Jean-Claude Juncker, chairman of eurozone finance ministers, said the single currency was overvalued.
Dan Denning says the dollar rally will continue to push down key commodity prices in the short term. The problem is there’s little to support the dollar’s climb over time.
This makes mining stocks a bargain for the long-term investor.
Russell McDougal at Investor’s Daily Edge says there is too much dollar-based debt that can’t be paid back for the buck to survive in its present form. Another Nixonian dollar default is coming, this time via hyperinflation. And the same people who have sentenced the greenback to death will be launching its replacement, the Amero.
“Bindra ends 108 year wait” proclaimed the DNA headline. And indeed it was a day to celebrate. But there was another not so golden bit of news. The price of gold, which began the year at USD 834 per troy ounce, peaked at USD 1032.7 on March 17, 2008, and slipped to USD 818.63 on August 11, 2008, the low for the year. Year to date, gold has declined (-)2%.
The Sovereign Society’s currency analyst, Sean Hyman, says investors should stick to trading currencies. There are over 13,000 stocks open to public trading. But there are only eight major traded global currencies. This makes it far easier to keep track of movements and trends. And it means there’s more chance of picking a winner…
The Sovereign Society’s managing director, Erika Nolan, has given some useful baics about what you need to know before you jump into foreign-exchange investing.