2026 TeoTwawKi ... 2032 Darkest Interregnum Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 476.10

+2.5%

Jan 27 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: elmatador who wrote (75661)	6/25/2011 3:19:20 PM
From: 2MAR$	Read Replies (1) of 219831

Notice the surprising sharp sell off in Gold from that 1550 resistance again & flight to the "relative safety" of the $USD which rose on friday ? Relative safety of the $USD has an odd ring to it but think that's what traders have determined near term since the dollar takes on more appeal as we near the closing of QE2 and Euro faced with the debt situation . One hypothesis below: (We must all learn to be forex traders, pips n piigs!) " US Dollar Appeal and Forecast Improve as QE2 Comes to An End " dailyfx.com The US Dollar (Ticker: USDOLLAR) saw an impressive rally into Friday’s close, bolstered by an encouraging outlook on US Federal Reserve policy and a flight to safety on worries over Greek debt troubles. US Federal Reserve Chairman Ben Bernanke struck a relatively hawkish tone as he said a third round of Quantitative Easing was quite unlikely; the coming week marks the formal end of the QE2 asset purchase program. The end of QE2 hardly guarantees US Dollar strength but removes significant headwinds, and the Greenback could see fundamental support in weeks and months ahead. A busy US economic calendar promises further fireworks through upcoming trade, and it will be important to watch how the US Dollar reacts to increasingly significant economic data. Markets will pay particular attention to Personal Income and Spending, Conference Board Consumer Confidence, University of Michigan Consumer Confidence, and ISM Manufacturing data. Focus remains on whether the US economy can continue to recover and eventually prompt the Federal Reserve to tighten policy. Watch for the US Dollar to be especially sensitive to large surprises in consumer confidence figures and the employment sub-index of the ISM Manufacturing report. It is difficult to predict whether the USD will see a boost from the formal end of QE2, and one would suspect that the clearly anticipated conclusion is largely built into the current dollar exchange rate. Yet the end of asset purchases removes a hurdle in the way of a US Dollar recovery; the Fed will no longer be growing its balance sheet and aggressively increasing the supply of US Dollars. The effects of Quantitative Easing have been far-reaching, and we suspect that the end may be similarly eventful for financial markets. One potential effect is to make the US Dollar once again a safe-haven currency of choice, sparking Greenback rallies on significant turmoil across financial market. Already we’ve seen the USD bounce noticeably against the euro on the real risk of a Greek debt default and broader euro zone instability. Yet the US currency has fallen far behind other traditional safe-havens such as the Swiss Franc and the Japanese Yen. The end of fresh Quantitative Easing is unlikely to be a cure-all for the Dollar’s ills, but it could go a long way in boosting its attractiveness against similarly low-yielding currencies. If our hypothesis is correct, watch for the US Dollar’s correlation to equity markets and broader financial market risk sentiment to strengthen through the near term. The Dow Jones Industrial Average’s continued losses have coincided with rallies in our own Dow Jones FXCM Dollar Index. If stocks continue their recent slide into the final week of QE2, watch for the previously-downtrodden US Dollar to stage a further reversal. - DR

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next