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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Louis V. Lambrecht who wrote (22689)	12/4/2002 8:35:49 AM
From: TheBusDriver	Read Replies (1) \| Respond to of 36161

<<Many US Dollars are deposited in European banks (aka Eurodollars) to profit from the interest yield>> No sure I follow you. You're saying they take USD and deposit in local currency which is paying higher rate than US? If this is what you are saying then I get your drift.... << am a complete dummy when talking about interest rates.>> You're not the only one.<g> Wayne

To: Louis V. Lambrecht who wrote (22689)	12/5/2002 8:54:10 AM
From: sandeep	Read Replies (2) \| Respond to of 36161

The interest rate cut works in favor of the currency in medium term. The dollar got creamed due to the interest rate differential a few days ago post the 50 basis point cut. However, if the economic activity is increased due to a cut, money tends to follow to that region from outside and hence the currency appreciation in the medium term. Just imho. EUR is a buy against the dollar right now in my book.