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Pastimes : The Philosophical Porch

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To: Rarebird who wrote (2861)	4/25/2008 8:05:03 AM
From: Real Man	Read Replies (1) of 26251

Well, in some sense that's exactly what the market has baked in right now, so it seems it should not be either bullish or bearish. The expectations shifted to Euro cuts due to German/French slowdown, which rallied the USD/EUR and the dollar. If these expectations are false, and Trichet continues to be hawkish, no mas to the dollar rally, IMHO, it's just another oversold bounce on the way lower. Note that 225 bp. extra cuts contributed to a drop of USDX from 76 to 73 now. The expectations of global recession and FCBs multiple cuts to follow the Fed are fully priced in... If they don't, then the dollar will have a cow. quotes.ino.com Eur/USD rests more on what the ECB will do now than on the Fed. Note that some degree of FOREX intervention is also happening, since the G7 clearly stated just that. This might put a bottom, but the bottom is unlikely, unless the ECB abandons its hawkish stance.

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