Tuesday, June 10, 2008

Dollar on the rise.

The dollar has been given a boost in recent days by remarks from Henry Paulson, saying he wouldn't rule out the possibility of intervention in the foreign exchange market. This coupled with Ben Bernanke's comments of last week stating that they are watching the dollar very closly has left the dollar with a very real bid to it.




Anonymous Anonymous said...

I'm curious about what makes the rhetoric different this time around. It really does sound different to me, but I'm curious about what you think. The markets seem to be responding, but for how long? I remember the last time around -- when the Euro was pushing up toward 1.3 against the USD. Everyone ignored the Fed and the SecTreas and just piled on longs. 2008 will be an interesting year, to be sure. So will 2009 and 2010. (Room for about two interest rate regime cycles, no? I see rates going up up up.) If the Fed does intervene, I wonder if it will have the same impact as the BoJ interventions in 2002...and if it will be just as tradable. (Back then several retail FX brokers were honoring their buy and sell stop orders. Not so today.)

3:19 AM  
Blogger Banker said...

You seem correct about the markets responding "but for how long" I am working on a post now about my weekly traders meeting and I think there is a good chance that the dollar makes new lows.

Take a look and let me know what you think

7:05 PM  
Anonymous Anonymous said...

I actually wouldn't be surprised to see the USD make new lows this year -- but then again, I wouldn't be surprised to see WTI head below $100, either. And I wuoldn't be surprised to see the Fed begin to tighten in Q3 or Q4. Man, am I glad I'm trading shorter term plays. The long term stuff is very, very difficult.

Looking forward to your post.

11:41 PM  

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