Dollar Hits 12-Month High Vs Euro On Greek Woes
May 4th, 2010Warning: This is not a recommendation to buy, sell or hold any financial instrument.
These were my warnings to dollar bears from November and December 2009. Holy crap, I hope that some of you used that information to avoid decapitation (and hopefully to profit).
Since February of this year, the dollar and gold have been meandering upward together, which means that bad weirdness is occurring in the international system. My guess is that the chaos in Europe is driving the bid on both the dollar and gold. The relative strength of gold, in the face of the skyrocketing dollar might mean that gold buyers are shrugging off the dollar move. Longer term, dollar bulls and gold bulls can’t both be right.
A setup for long euro and gold might emerge after a little bit more dollar strength. I’ll post specifics as we get closer to the pertinent levels on the charts.
Via: Dow Jones / Wall Street Journal:
The dollar soared to a series of 12-month highs against the euro Tuesday as optimism over economic recovery in the U.S. contrasted with doubts about a successful resolution to the Greek debt crisis.
Concern that the unprecedented EUR110 billion aid package to Greece won’t enough to prevent the crisis from spreading to other euro-zone countries sent the common currency tumbling more than 1% on the day. Fears have also set in about the Greek government’s ability to carry out harsh austerity measures required by the aid package.
Hopes of further recovery in the U.S. economy bolstered the greenback against most rivals, with a widely watched dollar index hitting a 12-month peak. Strong U.S. economic data have reinforced expectations that the Federal Reserve will be able to raise interest rates faster than its counterparts in the European Union and Japan.
The euro was at $1.3055 from $1.3191 late Monday, according to EBS via CQG. The dollar was at Y94.37, from Y94.59, while the euro was at Y123.23 from Y124.80. The U.K. pound was at $1.5148, down from $1.5249. The dollar was at CHF1.0971, up from CHF1.0861.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at a 12-month high of 83.063, up from 82.370.
“People are becoming well aware of the fact that the solvency issue for Greece hasn’t been resolved with the aid package,” said Adarsh Sinha, foreign exchange analyst at Barclays Capital in London. “They still have to repay the money. They still have to repay the interest.”
haha, even my guesstimate of GS fine was ridiculously high!
Separate from the SEC fraud charges, Goldman’s market-making unit has been censured and fined $450,000 after U.S. regulators found hundreds of violations in how it processed customer trades involving short sales of stocks.
http://news.yahoo.com/s/nm/20100504/ts_nm/us_goldman
I’m thinking that my move to Pm’s is the right move. Waiting until Mercury is out of retrograde and shadow to make another serious move re my investments(last week of May).
Goldman Sachs is going down in a serious way. It’s an event to behold with awe and wonder. Much like watching the aliens disintegrate because they can’t handle a virus they’ve encountered on planet Earth (War of the Worlds) or that Independence Day thingo.
It’s a big Karmic wheel we are on friends. Nice to see that Corporations are also subject to the laws of Karma – what you send out into the universe by your actions – whether right action – or something adverse – will come back to the actor – whether an individual or corporate with positive or negative consequence.