Dollar on path for a crisis - Penny Stocks

Tue, 11-14-2006, 02:46 PM

A lack of words can speak a lot louder than the words themselves.

The currency market can be very frustrating for traders, because it doesn't always follow a clear fundamental logic. It can rise and fall in unison with bond yields, but also with bond prices; it can fall on a widening trade deficit, but it can also rise if that deficit is expected to lead to increased pressure on politicians to act.

It can also fall when the U.S. says, and when it doesn't say, it has a strong dollar policy.

The dollar is moving toward a crossroads. The U.S. Dollar Index, which tracks the buck against a handful of the world's major currencies, has been consolidating along an uptrend line that began in December 2004, but also along a downtrend that started in November 2005.

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Wed, 11-15-2006, 11:21 AM

Hey checked out the rest of the article on your blog, Ok yes it is true that the Foreign Exchange market is pretty indecisive and investors have to face lot of uncertainty and due to any or no announcements by the Federal Reserve has an effect on the US dollar which in turn effects lots of other world currencies. But also that the Dollar on it’s own cannot be blamed for such irregularities in the market because there are other factors like internal economic changes which add fuel to the increase or decrease in a currency, like the one happened yesterday with the Yen , when it weakened against the Dollar and the Euro after a Government report showed that the Japanese market had a greater than expected growth in the third quarter which will give Japanese investors more confidence to buy overseas assets.

There are other reasons like the interest rate change , in fact this is the first reason as to the fluctuations in the foreign currency market ....

Wed, 11-15-2006, 02:25 PM

That is in way correct, in fact what happened today is that Mr. Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency.

Failure by the U.S. government to shrink its budget deficit may spook the central banks, hedge funds and others who have been buying Treasury notes, Rubin said. Volcker said the U.S. borrowing requirements raise the risk of a "crisis" in the dollar as soon as the next 2 and a half years.

The U.S. currency has fallen in recent years, in part because of concern America will fail to attract enough capital to finance its borrowing. The Federal Reserve's dollar index has declined 27% since December 2001. The dollar is down 7.4% against the euro this year and is little changed vs. the yen.

Tue, 11-14-2006, 02:46 PM	#1 (permalink)
xtraderx Posts: n/a	Dollar on path for a crisis A lack of words can speak a lot louder than the words themselves. The currency market can be very frustrating for traders, because it doesn't always follow a clear fundamental logic. It can rise and fall in unison with bond yields, but also with bond prices; it can fall on a widening trade deficit, but it can also rise if that deficit is expected to lead to increased pressure on politicians to act. It can also fall when the U.S. says, and when it doesn't say, it has a strong dollar policy. The dollar is moving toward a crossroads. The U.S. Dollar Index, which tracks the buck against a handful of the world's major currencies, has been consolidating along an uptrend line that began in December 2004, but also along a downtrend that started in November 2005. Market Activities & Views

Wed, 11-15-2006, 11:21 AM	#2 (permalink)
avio Posts: n/a	Re:Dollar on path of crisis Hey checked out the rest of the article on your blog, Ok yes it is true that the Foreign Exchange market is pretty indecisive and investors have to face lot of uncertainty and due to any or no announcements by the Federal Reserve has an effect on the US dollar which in turn effects lots of other world currencies. But also that the Dollar on it’s own cannot be blamed for such irregularities in the market because there are other factors like internal economic changes which add fuel to the increase or decrease in a currency, like the one happened yesterday with the Yen , when it weakened against the Dollar and the Euro after a Government report showed that the Japanese market had a greater than expected growth in the third quarter which will give Japanese investors more confidence to buy overseas assets. There are other reasons like the interest rate change , in fact this is the first reason as to the fluctuations in the foreign currency market ....

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Wed, 11-15-2006, 02:25 PM	#3 (permalink)
xtraderx Posts: n/a	That is in way correct, in fact what happened today is that Mr. Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency. Failure by the U.S. government to shrink its budget deficit may spook the central banks, hedge funds and others who have been buying Treasury notes, Rubin said. Volcker said the U.S. borrowing requirements raise the risk of a "crisis" in the dollar as soon as the next 2 and a half years. The U.S. currency has fallen in recent years, in part because of concern America will fail to attract enough capital to finance its borrowing. The Federal Reserve's dollar index has declined 27% since December 2001. The dollar is down 7.4% against the euro this year and is little changed vs. the yen.