Thursday, December 06, 2007

Get ready, rates are coming lower

I think the trend is pretty clear now, rates are coming lower. Not only here in the States but globally as well. This week,Bank of Canada and the BOE both lower rates 25bp (expectations were for no change) and the RBA came out with very dovish comments. Next week the Fed meets and the question is not if they are going to cut but by how much 25bp or 50bp (I think 25bp). A Recession seems to be on everyone's mind and if that occurs then the Global economy has to slow. I think the Fed is very aware of this and is doing all it can to prevent a total collapse of the economy. I am not looking for a recession but I do expect a considerably slower economy in 2008. 1.5-2.0% growth would not surprise me. I also think that the Fed would be ok with this as long as there was no recession. With this slowdown I think that the Dollar will do better. I am currently positioned long (see previous posts) and will continue to hold that position for the near term at least.

Good Luck and Good Forex Trading.

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