DOLLAR SHARPLY LOWER
December 15th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Ok, the number to watch on gold is $850. Seriously, if it can make it over $850, you might want to have your popcorn ready to enjoy the show.
Via: Reuters:
The dollar hit a two-month low against the euro and a basket of currencies on Monday, as investors shunned the U.S. unit on uncertainty surrounding the fate of its ailing automakers and the possible economic impact.
The dollar was starting to respond negatively to concerns about further weakness in the U.S. economy, after an ongoing run of weak data had boosted the currency due to an exodus from risky positions.
“The tide seems to have turned around in recent sessions, with bad U.S. economic news now hurting the dollar rather than helping it,” said UBS analysts in a research note.
By 1223 GMT, the euro was up 1.0 percent at an eight-week high of $1.3508, according to electronic platform EBS.
The dollar also hit a two-month low against a basket of currencies at 82.897 .DXY.
Analysts said the dollar was also suffering as investor demand to dump risky positions and repatriate those funds back into the U.S. currency have started to dry up. Deleveraging trades have also started to calm as currency markets show some sign of stabilising, they added.
The yen fell slightly against the dollar to 90.65 yen, after hitting 13-year highs of 88.10 yen on Friday. Yen gains were capped on speculation that Japanese authorities could intervene to curb further rapid appreciation.
Sterling was supported against the broadly weak dollar, although ongoing concerns about the rapid deterioration of the UK economy helped to push the pound to a record low of 90.22 pence against the euro, according to Reuters data.
Investors also awaited the outcome of a policy meeting by the Federal Reserve on Tuesday to see how close to zero the U.S. central bank will cut interest rates and indicate whether it will aggressively deploy quantitative easing measures to shelter the economy from a downturn.
The Fed is widely expected to cut rates by 50 basis points or more from 1 percent. With interest rates rapidly approaching zero, the Fed may also indicate more steps to provide liquidity into the market to help support the economy through a recession.
If by popcorn, you mean leverage long positions stacked with limit orders, then I´m getting the kettle going now.
NG (Novagold) up 78% today, Tyhee up 29%.
WA
HOO