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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Benkea who wrote (23384)	8/18/1999 10:52:00 PM
From: James Strauss	Respond to of 99985

Benkea: I think the FED does have to raise rates to protect the dollar... I also think the Japanese will buy dollars... The end result will be favorable for Japanese exports and hurt our imports over there... Lawrence Sommers is not as hawkish about defending the dollar as was Robert Rubin... Jim

To: Benkea who wrote (23384)	8/19/1999 10:25:00 AM
From: Fun-da-Mental#1	Respond to of 99985

"raise rates to strengthen the buck" -exactly. That's why Canadian interest rates are higher than American, because we're fighting to keep our dollar from going lower. Or look at South America over the past year: 40% interest in Brazil, over 100% interest in Venezuela, just to defend their currencies. The US can be subject to the same effect. But I imagine the Fed would rather let the dollar fall than raise interest rates quickly. They're committed to fight domestic price/wage inflation, but the falling dollar is inflation in another form, and they may allow it because they're not being so closely scrutinized on that score by the media. BWIDK Fun-da-Mental