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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (6828)	2/3/2004 12:22:35 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

My broker just sent me this - Do not know the source. In contrast with its recent more covert activity, the Bank of Japan conducted more obvious intervention at midday in Europe Tuesday, as the dollar showed signs of breaking through key support at Y105.30. The dollar purchases, believed to have come in at least two aggressive bursts, helped to push the U.S. currency back up to Y105.85 at one stage late in the morning. Estimates put the total amount of intervention as high as $4 billion. By 1200 GMT, the dollar was back down at Y105.65, with the Japanese central bank said to be still present, soaking up any offers. The dollar came under pressure from early in the European day, hurt by reports that small amounts of ricin powder had been found in the office of a U.S. senator and by the growing assumption that the U.S. will do little to prevent further dollar weakness when it meets with other Group of Seven countries this weekend. Although European countries and Japan are expected to complain at the meeting about the damage the weakness in the dollar against the euro and the yen is inflicting on their economies, this is seen falling on deaf ears as the U.S. administration continues to seek further stimulation for the U.S. recovery. If that happens, the market is likely to interpret this as another sell signal for the dollar, reversing the recent correction that helped bring the euro back from a high of $1.2900. By midday, the euro had been lifted back up to $1.2574 from $1.2427 late on Monday in New York. Eisuke Sakakibara, a former vice minister of international affairs, is reported to have confirmed the market's bearish view of G7, warning that the summit of finance ministers is unlikely to settle currency differences and that the group's communique will have little effect on the market. Meanwhile, the market is also keeping an eye on the European Central Bank, which holds its next policy meeting Thursday. Although it isn't expected to consider lowering interest rates to undermine the euro at this stage, some feel that the ECB will contemplate intervention on its own behalf if the euro faces more serious upward pressure - both against the dollar and the yen - after G7. ========================================================== Why would those morons contemplate intervention? Can't they see that Japan intervention has been worthless. If they want to support the US$ they need to cut. That is the long and short of it. Otherwise they are just wasting money. Mish

To: Haim R. Branisteanu who wrote (6828)	2/3/2004 12:26:49 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

The paragraphs below summarize exactly why this meeting is likely to be useless. Both sides want something different. The US appears to not be concerned about a lower dollar and in fact I think they want one. Europe wants the US to act to support the dollar but the US does not want to raise rates before there are jobs. ========================================================== ``The least I expect is that finance ministers, including the U.S., will come to a common statement saying they are worried about the dollar's weakness and that this development won't continue,'' Rogowski said. Without a statement on the dollar ``I expect the markets will then test the dollar again, so we would see a further devaluation,'' he said. The U.S. may resist a common statement that would risk triggering a rise in the dollar as President George W. Bush prepares to run for reelection in November, Rogowski said. ``The U.S. is probably interested in a relatively low exchange rate of the dollar as this supports their economy,'' he said.