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Non-Tech : Moguls Mantra to the Markets -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (129)	7/27/2001 1:29:18 PM
From: $Mogul	Read Replies (1) \| Respond to of 220

The U.S. dollar index, a measure of the dollar's performance against six major currencies, is up about 0.25% on the day after rebounding from earlier weakness that followed the GDP report. The index hit a two-month low of 116.58 on Thursday, down from a recent peak of 121.29 on July 5. The dollar is overvalued and has likely plateaued according to Morgan Stanley. A correction could be triggered by 1) a collapse of OPEC, 2) a sluggish U.S. recovery, 3) pessimism about U.S. productivity growth, or 4) a rally in the Nikkei. The correction would likely be a soft landing that would favor the euro over the yen, according to the Morgan Stanley report. Capital flows remain the dominant influence on the dollar, however, with foreign purchases of stocks and bonds largely responsible for the dollar's recent strength. M&A flows have also played a significant role. The inflow of capital could well continue, owing to high relative rates of return in the U.S., aggressive Fed rate cuts relative to the slow pace of cuts by the ECB, and the need for global fixed income money managers to increase their exposure to U.S. assets.