Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (36225)	3/2/2002 5:15:51 PM
From: Ibexx	Read Replies (1) \| Respond to of 99280

03/02 10:57 Dollar Seen Reaching a 6-Month High vs Euro: Currency Outlook By Mark Tannenbaum New York, March 2 (Bloomberg) -- The dollar may rise to a six- month high against the euro next week as U.S. growth exceeds Germany's. Prospects for the U.S. currency improved after factory production expanded for the first time in 19 months in February and European manufacturing continued to shrink. The world's biggest economy expanded more than projected during the fourth quarter, while Germany, Europe's largest economy, had no growth. ``The U.S. is ahead'' of Europe and is accelerating more rapidly, said Jason Bonanca, a currency strategist at Credit Suisse First Boston. ``It's going to be good for the dollar'' as long as the Federal Reserve doesn't start to raise interest rates more quickly than other central banks, he said. The dollar snapped a three-week slide against the euro this week, rising 1.1 percent from last Friday to 86.55, about 1 cent from the six-month high of 85.65 cents it reached Feb. 1. The U.S. currency fell 0.6 percent against the yen from a week earlier, to 133.30, leaving it up 1.3 percent since the start of the year. In coming weeks the dollar may strengthen toward 84 cents per euro as accelerating growth boosts the appeal of investing in the U.S., Bonanca said. The euro hasn't fallen past 85 cents since July. Manufacturers The U.S. currency is about 1.3 percent below the 15-year high it reached in July against a pool of currencies comprising the euro, yen, British pound, Canadian dollar, Swedish krona and Swiss franc. The currency's continued strength is a concern for U.S. manufacturers, who said last month that they are stepping up a lobbying effort to convince members of Congress that a rising dollar makes them less competitive relative to foreign rivals. The U.S. economy expanded at a 1.4 percent annualized clip in the fourth quarter. Germany's gross domestic product was flat, while Japan is expected to report that its economy shrank in the period. Given the unexpected strength in statistics such as the manufacturing data, the U.S. may expand at a 3.5 percent pace or more this quarter, said Bonanca at Credit Suisse First Boston. In December, the average forecast in a Bloomberg News survey was for 0.2 percent first-quarter growth. Trade Deficit Though growth in the 12 nations using the euro is likely to be positive in the first quarter, ``it's not going to be on the level of the U.S.,'' said Larry Greenberg, an international economist at Ried, Thunberg & Co. in Westport, Connecticut. The widening U.S. advantage points to dollar strength for the time being, he said. Within the next three years, Greenberg said he expects the dollar to depreciate because the U.S. trade deficit will be so large that it will outstrip foreign capital flowing in. As the U.S. economy picks up faster than those of its major trading partners, the deficit may widen as imports increase faster than exports. Last year, the trade deficit narrowed to $346.3 billion from a record shortfall of $375.7 billion in 2000, as demand slowed during the recession. February labor statistics, out next Friday, are expected to show the level of U.S. non-farm jobs was unchanged, after six months of declines. Jobs, Greenspan Still, the jobless rate is forecast to rise to 5.8 percent, matching January's six-year high, a sign the economy is not completely out of the woods yet, and some investors say they're not convinced the U.S. rebound is sustainable. A Thursday appearance by Fed Chairman Alan Greenspan before the Senate Banking Committee will be a focus for traders. The key will be whether he repeats his remarks from this past week that the recession may be ``drawing to a close,'' though the rebound may be subdued. ``I still question the recovery here,'' said Chris Melendez, president of Tempest Asset Management, a hedge fund in Irvine, California. He said he's expecting a ``double-dip'' in U.S. growth, and plans to buy euros if the 12-nation currency, still down 26 percent from its January 1999 debut, falls to about 85.50 cents. Ibexx