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

To: Gary Wisdom who wrote (27313)	9/26/1999 1:32:00 PM
From: TimbaBear	Respond to of 99985

Gary....I'm not an expert on this but have some thoughts....the US expanded money supply during the Asian crisis because they didn't want the dollar to get too strong from the extra demand caused by other countries using dollars instead of their own currency....now that those economies appear to be on the mend, their usage of their own currency is expanding and the US must take dollars out of circulation to again bring dollar supply and demand into parity....I think the dollar/Yen exchange rate is just finding it's new level....since the dollar doesn't appear weak against other major currencies, I'm not too worried about this adjustment period. Regarding the G7....I think the world doesn't really know how Summers will respond to currency issues....there seems to be consensus that he is a bright individual, but is he market savvy?....I think there might be anxiety that he will take a position that will cause the markets to tank....from what I have read of his remarks at and after the G7, he appears to be wearing the responsibility OK and that may go a long way to reassuring those concerned....it will be interesting to see the reaction of the markets in the next few days. Now that the Yen is again becoming popular in Asia, the demand has increased but their Treasury did not increase supply quickly enough and therefore supply is less than demand, driving up the value for the short term....at the end of the G7 they said that they would increase supply, so we'll see what happens.