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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (3363)	5/29/2002 1:09:20 AM
From: Henrik	Respond to of 3536

<< The roar you hear is the stampede of disenchanted investors getting out of US assets and going shopping elsewhere. The Australian gold sector is clearly one of the first ports of call. The 'sell America' story is also generating big demand for Australian dollars, so much so that local exporters must be breaking out in a sweat >> afr.com

To: Lee who wrote (3363)	5/29/2002 11:08:20 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 3536

Take a look at the fundamentals. The U.S. current account deficit means that about 1.3 billion dollars are on offer in the foreign exchange markets every day. I'm of the opinion that the dollar will keep dropping until it reaches a level that puts a serious dent in those flows. It will be a long adjustment process, perhaps taking years. But when it's over, the dollar will be significantly lower than it is today. This isn't the bad news that today's headlines make it. It's just the market's way of correcting a situation that was extremely imbalanced the last few years and hidden by speculative flows into the dollar. Now those speculative purchases are being pulled away and revealing an untenable level for the dollar.