Naveen, in the order of sophistication, currency traders are on the top of every trader group - stocks, bonds, and commodities. Simply put, they are the real fundamentalists. In one sense, they help keep the world's financial imbalances in check. In the other, of course, they profit from it. They love "artificial" interventions because it will give them another chance to make profit from the inevitable move towards equilibrium. A small group of brain-dead policy makers like Hashimoto, Clinton, Rubin and the bureaucrats like Al Greenspan, at best, have temporary influence.
Then, you might ask, why is that US$ is so high despite the fact that the trade deficit is so high and M3 is growing at 11% clip. I would say that it is because when you have dirt piled-up in a room, you keep cleaning it from one corner while the furniture is moved to the other corner, the US. But once the other side of the room is clean, the furniture is readjusted. JMO.
Good luck!
-MMV |
