Re: [TNF] US Dollar is sliding

["Gary Santos" <evs@xxxxxxxxxxxx>]

The dollar will fall another 10%, but no big deal in macro terms.  Just some
profit opportunities for traders, that's all.
-------------------------------
I suppose that would be the 0.80 on the USDX. What if the market makes it
break support? My question really is: Will the East Asian currencies
necessarily fall with so much of their reserves in US dollars not to mention
to keep currencies competitive?


----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: <TheNewForum@xxxxxxxxxxxxxxx>
Sent: Thursday, May 01, 2003 1:59 PM
Subject: Re: [TNF] US Dollar is sliding


The market closing in China is SARS related.

China will not depeg its currency nor revalue its exchange rate at 8.2
yuan to US$1 in the foreseeable future, at least 5 years.  It may
however, shift some of its foreign reserves to euros, which at this
moment constitutes about 20% of its total.  But before that China-EU
trade would have to pick up, which is what the EU wants to do.  But the
EU would have to create a lot more euro-euros (off-shore counterpart of
euro-dollars) before the euro can seriously challenge the dollar.

The dollar will fall another 10%, but no big deal in macro terms.  Just
some profit opportunities for traders, that's all.

Henry C.K. Liu

Kathy in the Rocky Mountains wrote:
> Perhaps it would be Bob B's MCHVIE -- seriously!
> -----Original Message-----
> From: Ron Jaenisch [mailto:ronj@xxxxxxxxxx]
> Sent: Wednesday, July 30, 2003 9:00 PM
> To: TheNewForum@xxxxxxxxxxxxxxx
> Subject: RE: [TNF] US Dollar is sliding
>
> Kathy
> thats just a matter of time
> it would create one heck of a jolt for a lot of products
>
>
> Regards
> Ron
>
> We accept that neither the kind of matter under examination, nor the
> type of object being observed, nor the choice of measuring instrument,
> may influence the validity of the fundemental laws of change of the
> material parameters which are being measured.
> -------Original Message-------
>
> From: TheNewForum@xxxxxxxxxxxxxxx <mailto:TheNewForum@xxxxxxxxxxxxxxx>
> Date: Wednesday, April 30, 2003 20:53:30
> To: TheNewForum@xxxxxxxxxxxxxxx <mailto:TheNewForum@xxxxxxxxxxxxxxx>
> Subject: RE: [TNF] US Dollar is sliding
>
> If they do, Ron, what do you see as the ramifications for them and for
> us and for others?  This would be a serious shift IMO.  With best
> regards,  Kathy
> -----Original Message-----
> From: Ron Jaenisch [mailto:ronj@xxxxxxxxxx]
> Sent: Wednesday, July 30, 2003 8:49 PM
> To: lwside1@xxxxxxxxxxxxxxx; TheNewForum@xxxxxxxxxxxxxxx
> Subject: RE: [TNF] US Dollar is sliding
>
> China's currency is peged to the $$
> They are closing their stock market for 2 weeks.
> Will they use this time period to let their currency start to float?
>
>
> Regards
> Ron
>
> We accept that neither the kind of matter under examination, nor the
> type of object being observed, nor the choice of measuring instrument,
> may influence the validity of the fundemental laws of change of the
> material parameters which are being measured.
> -------Original Message-------
>
> From: TheNewForum@xxxxxxxxxxxxxxx <mailto:TheNewForum@xxxxxxxxxxxxxxx>
> Date: Wednesday, April 30, 2003 20:38:38
> To: TheNewForum@xxxxxxxxxxxxxxx <mailto:TheNewForum@xxxxxxxxxxxxxxx>
> Subject: RE: [TNF] US Dollar is sliding
>
>  From a recent Realmoney.com article authored by Aaron L. Task, 4/30/2003
>
> Dog Days for the Dollar
>
> Catalysts cited for the dollar's weakness included a weaker-than-expected
> report from the Chicago Purchasing Managers Index for April, which fell to
> 47.6 from 48.4 and vs. expectations for a slight increase. The new orders
> index fell to 44.6, the lowest level since December 2001. Separately, the
> National Association of Purchasing Management said its index of business
> conditions for New York fell to its lowest level since November 1999.
>
> The Chicago PMI, particularly, raised concern about Thursday's Institute
for
> Supply Management national survey, as well as Friday's employment report.
> (Buoyed by such concerns, the price of the benchmark 10-year Treasury rose
> 23/32 to 100 7/32, its yield falling to 3.84%.)
>
> The risk is for "downside surprises" for the dollar in the next few days,
> according to Lara Rhame, economist and currency watcher at Brown Brothers
> Harriman.
>
> Nevertheless, "the market is not looking at economic data" in determining
> currency values, Rhame said. Recent data from Europe have shown "the same
> old stagnation" on the Continent, and U.S. GDP is expected to well outpace
> that in the Eurozone this year, she noted. But "nobody seems to care.
People
> are buying up euros like nobody's business and I don't know what would
make
> this boat turn around."
>
> Beyond concerns about the outlook for the U.S. economy, the greenback is
> being battered by a variety of factors that are contributing to a "global
> shift in sentiment away from U.S. assets," according to Rhame. These
factors
> include psychological disappointment over the lack of a postwar bounce and
> ongoing yield discrepancies between the U.S. and Eurozone.
>
> This is occurring against the backdrop of America's yawning current
account
> deficit, which is not a cause of dollar weakness, per se, but makes the
> greenback vulnerable, she said.
>
> Lisa Finstrom, senior currency analyst at Salomon Smith Barney, largely
> agreed with that assessment, suggesting the key issue is the trend of
global
> capital flows. Data from the Bureau of Economic Analysis showed positive
> inflows of foreign capital in the fourth quarter, but overall flows have
> diminished from peak levels and the BEA data are lagging. Anecdotal
evidence
> suggests general cautiousness among foreign investors, particularly in
Asia,
> regarding the dollar, she said.
>
> "The postwar environment still looks shaky, even with some uncertainties
> behind us," Finstrom said, noting that neither the end of the military
phase
> of 'Operation Iraqi Freedom' nor more recent improvements with North Korea
> or SARS have given the buck a lift. The dollar's ongoing "defensiveness
> underscores continued concerns about the U.S. economy and the fact U.S.
> rates are unattractive."
>
> The European Central Bank's target rate is 2.5%, double that of the
Federal
> Reserve. Furthermore, the ECB has sent pretty clear signals it will not
ease
> at its May 8 policy meeting. Conversely, Greenspan hinted Wednesday that
the
> Fed remains ready, willing and able to ease again, if need be, even if few
> Fed watchers expect a move on May 6.
>
> "Comments from Fed officials aren't suggesting normalization" of the fed
> funds rate, which has been at 40-year lows since September 2001, Finstrom
> said. "They're comfortable keeping rates here, and are ready to cut rates
> further; it's an underlying negative" for the greenback.
>
> There seems to be a never-ending string of "underlying negatives" when it
> comes to the dollar these days. Thus far, major stock proxies and U.S.
> Treasuries have been insulated from such concerns, particularly in the
past
> month for shares. That bifurcation is unlikely to continue, assuming the
> dollar proves unable to mount a sustainable recovery.
>
>
>
>
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