Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: sitkapacific who wrote (50555)	5/4/2006 3:17:10 PM
From: regli	Read Replies (1) of 116555

Well, I think the past two weeks have at least been entertaining but not if you sit on a pile of dollars. With suggestions from the IMF and Feldstein (http://www.nber.org/feldstein/siepr319.pdf) among others for a devaluation along the lines of the Plaza Accord, I can't help but be very bearish on the dollar. There is little confidence in the greenback at this point for good reason and today was a perfect illustration. Note that Euro interest rates are still significantly below U.S. rates. yahoo.reuters.com "... The dollar fell to a one-year low against the euro on Thursday after European Central Bank President Jean-Claude Trichet seemingly validated investor expectations for a euro-zone rate hike in June. The ECB earlier left rates unchanged at 2.5 percent, as expected, but in an upbeat post-meeting statement, Trichet reiterated that the bank would need to exercise "strong vigilance" in setting monetary policy given the low level of interest rates and rising price pressures. ..."

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