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The Dollar Gains Some Ground

It'll be a while until the dollar (if ever) makes it back to post Euro formation levels, but today it took a nice step away from it's trend of steady decline. The dollar rose from the record low of $1.3667 to a six week high of $1.3044. Living in a debtor nation, I can take a sigh of relief.

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Dollar Surges Against Euro in Reversal Fri Jan 7,11:22 AM ET By Kevin Plumberg NEW YORK (Reuters) - The dollar quickly reversed course to rise against the euro on Friday, shrugging off losses sparked by lower-than-expected U.S. jobs growth, as traders continued to unwind bets against the U.S. currency. By late morning, the euro slipped to a six-week low at $1.3044 , down 0.9 percent compared with prices late Thursday in New York and well off the record high hit last week of $1.3667. Against the yen, the euro fell over 1 percent to a session low of 136.58 yen . "There's been a meaningful shift in sentiment on the dollar. ... A few months ago it seemed like the dollar could do no right and it traded lower on everything whether the data was positive or negative," said Sophia Drossos, currency strategist at Morgan Stanley. Drossos said comments from U.S. Treasury Secretary John Snow on the dollar helped to accelerate the currency's gains. "We want to do things to sustain the strength of the dollar; among them is going to the Congress to work on the deficit, to bring the deficit down," Snow told CNBC TV. Drossos said "(Snow's) comments along with the more hawkish tone we've heard from the Fed really call into question whether there's unequivocal preference for a weak dollar by U.S. authorities." Dealers also indicated important chart levels around $1.3140 were broken, which might have driven the euro even lower. "The market couldn't get the euro any higher on the overall positive employment number when taken with the revisions ... and couldn't get through $1.3250, so people bailed out of their long euro positions," said Robert Houck, a euro trader with Wells Fargo in Minneapolis. Even though December U.S. non-farm payrolls growth was slightly below expectations, the market still figured the Federal Reserve (news - web sites) is on track to raise interest rates further. The U.S. economy generated 157,000 jobs in December according to a government report, short of economists' prediction of 175,000. Payrolls growth in November and October was revised higher to 137,000 and 312,000, respectively. "The headline figure, at the margin, was disappointing and that's why you saw the dollar and yields fall. But the revisions bring December's number up to where expectations were, so that's not that bad," said Bob Lynch, senior currency strategist with BNP Paribas in New York. Price action was relatively steady after the employment report's release especially since any monthly job creation around 150,000 or higher is viewed by the market as a green light for the Fed to maintain its pace of quarter percentage point rate hikes in the near future. Higher U.S. rates tend to burnish the appeal of the dollar since they attract foreign investors to invest in U.S. assets. "The December Fed minutes made clear that so-so payroll growth is enough to support continued tightening," said Chris Low, chief economist at FTN Financial. Against the yen , the dollar fell 0.3 percent to 104.76 yen. The dollar was up 1 percent at 1.1870 Swiss francs , and dropped 0.3 percent to C$1.2232 . The jobs report extinguished any suppositions in the market that the Fed could speed up or increase the size of its hikes. "One thing (the jobs report) does argue against is any notion of accelerated Fed tightening," said Alan Ruskin, research director with 4Cast Inc in New York. "The earnings data was again soft and that element should give confidence that we're not going to see any major acceleration on the inflation front and that should be bond-friendly and dollar-negative." The dollar had started 2005 on a stronger note largely because analysts focused on expectations that the U.S. economy would outperform those of Europe and Japan, leading to more attractive interest rates for the U.S. currency. This outlook was reinforced by the release this week of minutes from the Fed's latest meeting which showed U.S. central bankers believed rates were too low to forestall inflation. The Fed is expected to raise interest rates again as soon as the start of February, bringing them up to 2.5 percent. (Additional reporting by Justyna Pawlak in London and Jamie McGeever in New York)

Re: The Dollar Gains Some Ground

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Originally posted by NeoPhono It'll be a while until the dollar (if ever) makes it back to post Euro formation levels, but today it took a nice step away from it's trend of steady decline. The dollar rose from the record low of $1.3667 to a six week high of $1.3044. Living in a debtor nation, I can take a sigh of relief.

personally, i actually prefered a week dollar - it's better for exporting (easier to sell lower priced dollar items). oh well with a stronger dollar i may be importing (easier to buy lower priced dollar items) more now

Re: Re: The Dollar Gains Some Ground

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Originally posted by Izzy personally, i actually prefered a week dollar - it's better for exporting (easier to sell lower priced dollar items). oh well with a stronger dollar i may be importing (easier to buy lower priced dollar items) more now

I prefer my dollars soft, two-ply, and in $100 denominations.

i kinda like it low, its awesome shopping in the US and electronics are much cheaper now

on the other hand is the rest of the world losing much exports... but oh well thats life i guess

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Originally posted by St_Andrew i kinda like it low, its awesome shopping in the US and electronics are much cheaper now on the other hand is the rest of the world losing much exports... but oh well thats life i guess

its a time bomb..slowly ticking..

Bring on world wide currency.

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Originally posted by St_Andrew i kinda like it low, its awesome shopping in the US and electronics are much cheaper now on the other hand is the rest of the world losing much exports... but oh well thats life i guess

You collaborationistic bastard! When you were living in the EU you didn't like the cheaper dollar that much, eh? Think of all the goats suffering because of the stagnating economy!!!

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Originally posted by DrUg_Tit0 You collaborationistic bastard! When you were living in the EU you didn't like the cheaper dollar that much, eh? Think of all the goats suffering because of the stagnating economy!!!

ya, think about the goats!

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Originally posted by Yoepus ya, think about the goats!

Like he doesn't think of them all the time...

whats wrong with you people? Why is everyone so mean to me just because i love goatsex

anyway, the US is just going to be another china in a few years manufacturing all the cool goods for us european and canadians

the fact that bush was re-elected only hurt the dollar imo...

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Originally posted by St_Andrew whats wrong with you people? Why is everyone so mean to me just because i love goatsex

the three of you are a riot

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Originally posted by Izzy the three of you are a riot

see now we are talking about rioting goats..allways wondered how these threads get side tracked...

I want a week dollar, I am going to the US of A next summer and I want it to be cheap

(going to the West Coast)

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Originally posted by Blik I want a week dollar, I am going to the US of A next summer and I want it to be cheap (going to the West Coast)

WEst coast sucks u should go to Chicago the best city in the US

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Originally posted by x-filer WEst coast sucks u should go to Chicago the best city in the US

I don't neccesarily agree with Chicago being the best city (although it's a great one), but the west coast is *always* expensive. The dollar would have to be incredibly weak for the prices on the west coast to come close to being as reasonable as they are in the midwest, south or even the east coast (although both coasts are expensive).

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Originally posted by NeoPhono I don't neccesarily agree with Chicago being the best city (although it's a great one), but the west coast is *always* expensive. The dollar would have to be incredibly weak for the prices on the west coast to come close to being as reasonable as they are in the midwest, south or even the east coast (although both coasts are expensive).

u see its why the west coast sucks too expensive and the ppl just suck their to stupid(hollywood) People in the east coast close to NYC think that their city is the center of the world. But chicago has the railroads and lots of highways leading all over the country and the art institute one of the best in the world and is home to the skyskraper

and NYC has everything...period :P "NYC is the Rome of the modern world"- John Lennon...no greater man.

Re: The Dollar Gains Some Ground

quote:

Originally posted by NeoPhono It'll be a while until the dollar (if ever) makes it back to post Euro formation levels, but today it took a nice step away from it's trend of steady decline. The dollar rose from the record low of $1.3667 to a six week high of $1.3044. Living in a debtor nation, I can take a sigh of relief.

The dollar is sinking .

wouldn't the value of the dollar primarly have a lot to do with the fact that the US is promoting a weak dollar policy and Europe is promoting a strong Euro policy (or what is the EU euro policy anyway?)

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Originally posted by Yoepus wouldn't the value of the dollar primarly have a lot to do with the fact that the US is promoting a weak dollar policy and Europe is promoting a strong Euro policy (or what is the EU euro policy anyway?)

?

perhaps, but the dollar IS going to shit, no policy in the world can emulate that. deficit anyone? lets start investing in the RMB since China is buying more and more trade currency|

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Originally posted by Yoepus wouldn't the value of the dollar primarly have a lot to do with the fact that the US is promoting a weak dollar policy and Europe is promoting a strong Euro policy (or what is the EU euro policy anyway?)

eeh no...The last thing the European Central Bank wants is a strong euro v dollar..simply because it makes the currency less competitive for european exporters.
Say for example company A in europe is making candles for 1 euro each and company B in the US is importing these candles for 1 dollar each now this example is assuming that the dollar and euro are at parity ie of equal value (as was the case not so long ago).
Today the situation is like this company A in europe is still charging 1 euro per candle but now because the dollar has lost value company B in the US has to pay 1.32 dollars per candle.
And basically this puts the european company at a disadvantage,it means it makes it harder for europeans to export to the USA.
This the last thing that the bigger economies in europe want because it puts them at a major disadvantage and some of them are struggling for growth even without the the problems of the dollar falling.

So all in all bad news for the europeans for all industrys.

Another good example would be say if a year ago you wanted to travel to europe for a holiday,and it cost you 1000 dollars you could have got 1000 euros for your dollars...today to buy that same 1000 euro it will cost you 1320 dollars so its bad news for americans as well depending on what you want to do.

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Originally posted by NeoPhono I don't neccesarily agree with Chicago being the best city (although it's a great one), but the west coast is *always* expensive. The dollar would have to be incredibly weak for the prices on the west coast to come close to being as reasonable as they are in the midwest, south or even the east coast (although both coasts are expensive).

We've been to Florida, Colorado, Utah, Arizona and Washington. (And Canada from Vancouver to Calgary, including Vancouver Island)

Now we had too choose between East Coast and West Coast, but my parents where in Washington DC 1 year ago so we choose to go the West for 3 weeks.

Looking forward to it let that dollar be very weak

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Originally posted by zig eeh no...The last thing the European Central Bank wants is a strong euro v dollar..simply because it makes the currency less competitive for european exporters. Say for example company A in europe is making candles for 1 euro each and company B in the US is importing these candles for 1 dollar each now this example is assuming that the dollar and euro are at parity ie of equal value (as was the case not so long ago). Today the situation is like this company A in europe is still charging 1 euro per candle but now because the dollar has lost value company B in the US has to pay 1.32 dollars per candle. And basically this puts the european company at a disadvantage,it means it makes it harder for europeans to export to the USA. This the last thing that the bigger economies in europe want because it puts them at a major disadvantage and some of them are struggling for growth even without the the problems of the dollar falling. So all in all bad news for the europeans for all industrys. Another good example would be say if a year ago you wanted to travel to europe for a holiday,and it cost you 1000 dollars you could have got 1000 euros for your dollars...today to buy that same 1000 euro it will cost you 1320 dollars so its bad news for americans as well depending on what you want to do.

That is precisely what the US wants though, not really a weak dollar worldwide but higher prices on imported european goods because europe has been intentionally flooding our market will cheap goods which was putting many people out of business. It got so bad that the US had to put tariffs on imported goods to save the economy, and likewise by the EU on US goods. Unfortunately it was ruled illegal by the WTO.

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Originally posted by BadBadNeil That is precisely what the US wants though, not really a weak dollar worldwide but higher prices on imported european goods because europe has been intentionally flooding our market will cheap goods which was putting many people out of business. It got so bad that the US had to put tariffs on imported goods to save the economy, and likewise by the EU on US goods. Unfortunately it was ruled illegal by the WTO.

Well if your logic is correct..how come all the major currencies Euro Yen Sterling are all strengthening against the dollar..and the dollar continues to fall..you cant just choose which currency you would like to see fall without direct intervention by those governments central banks to stop their currencys rising..and this aspect the US Federal Reserve has absolutly no control over..economic history is littered with intervention by central banks and they virtually all have been doomed.

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