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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ditchdigger who wrote (21696)	11/1/2000 5:08:53 PM
From: Sergio H	Read Replies (1) \| Respond to of 29382

Ditch, the European Central bank has been raising interest rates. I think there's been 4 or 5 rate hikes already and there's good reason to believe that they're going to give it another lift at their meeting tomorrow. I agree with you that the interest rate hike is not a positive for the Euro as obviously higher interest results in slower growth. Europe is facing inflationary pressure and will have to raise interest rates again. Which brings us to the exchange rate between the Euro and the US dollar. Anytime that economic statistics like today's Purchasing Manager's report indicate that the US economy is slowing down, the Euro gets a lift. Looking at the big picture, the US economy is still growing at a faster pace than the European economy, which results in a higher dollar and a weaker Euro. My understanding is that generally, economists expect that the recovery in the Euro will not occur until Spring 2001. The constant market rotation in our market is beginning to become predictable. Paper/lumber rally day one, followed by semiconductor/high tech rally day two, and on day three the oil and gas rally kicks in. One, two, three, repeat... Sergio