Monday, May 19, 2008

The Dollar Fall's as Crude moves higher.

The Dollar once again is under attack as Crude marched higher in spite of talk from Saudi Arabia's oil minister Ali al-Naimi that they would increase production by 300,000 barrel's a day to 9.45 million barrels. No thing it seemed could stop the fall. All commodities were once again bid with Gold,Soybean, Wheat and Zinc leading the way. Some in the market are blaming Goldman Sach's:

``We can blame Goldman again,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``In March 2005 they predicted that prices would rise dramatically, and they did. Prices jumped to the $125 level after another Goldman report less than two weeks ago. At this point nobody wants to bet against Goldman.''

Also adding to the surge in Crude prices was the increases in purchases from China.

PetroChina International Co., the trading unit of PetroChina Co., the country's biggest oil producer, has already purchased 2.9 million barrels of diesel for June. That's in addition to the 1.45 million barrels that China International United Petroleum & Chemicals Corp. bought for the month.

The complete story can be read on BLOOMBERG.

I was short Euro but was stopped out on Friday. My other positions remain the same:

Short Usd/Cad
Short Usd/Clp
Short Usd/Cop
Short Usd/Ars

I think I will stay away from the Euro for a while as I have been unable to make any money on my position's in this currency pair for quite some time. In Argentina it seems that they are very close to ending the farmers strike. Banks and Business groups are urging that the Government settle the strike right away. The market responded by selling dollars aggressively after this news.

Mexico had a Rate Announcement on Friday and as expected held rates steady. They did speak of inflation in a lengthy way but it was certainly not in the aggressive nature that the market wanted. As such any thought of a rate increase in the near term future seems to be off the table.

Good Luck and Good Currency Trading

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Blogger FXoldsalt said...

Smart decision to stay away from the Euro, this morning's Ifo was the reverse of what was expected and their head also talked about an ECB hike..pressure is still all from the Germans, there is a good article in the Economist titled Too good to last, and another purchasing-power disparity - pages 63 & 64 - well worth a look. Bias is to fade the rally soon

8:26 AM  

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