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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (20700)	1/7/2005 12:13:25 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 116555

Haim, I only got the March prediction. He makes me laugh. What a great scam he has going. Meanwhile, the other part of The Daily Reckoning has Nassim Taleb talking about how all these patterns people identify are useless. <G>

To: Haim R. Branisteanu who wrote (20700)	1/7/2005 3:39:53 PM
From: mishedlo	Respond to of 116555

Dollar rallies broadly, boosted by Snow remarks Friday, January 7, 2005 7:52:53 PM reuters.com By John Parry NEW YORK, Jan 7 (Reuters) - The dollar barged higher across the board on Friday in a technically-driven rally that gained momentum after remarks by U.S. Treasury Secretary John Snow, traders said. The currency erased earlier losses sparked by lower than expected U.S. jobs growth in December, as traders returned to unwinding bets against the dollar. That sent the euro to six-week lows well below a key support level at $1.3140, auguring more near-term losses, technical analysts said. In midafternoon trading in New York, the euro <EUR=> was at $1.3058, down 0.8 percent from levels late Thursday in New York and more than six cents below the record high last week of $1.3667. Against the Swiss franc, the dollar was up 0.9 percent at 1.1849 francs <CHF=>, but was down 0.2 percent against the yen at 104.84 yen <JPY=>. Sterling <GBP=> was down 0.2 percent at $1.8704. The euro fell 1 percent against the yen to 136.95 yen <EURJPY=>. "There's been a meaningful shift in sentiment on the dollar ... A few months ago it seemed like the dollar could do no right and it traded lower on everything whether the data was positive or negative," said Sophia Drossos, currency strategist at Morgan Stanley. Drossos said Snow's comments on the dollar helped to accelerate the currency's gains. In the first of a series of television and radio interviews on Friday, Snow said the United States supports a strong dollar and wants to "do things," including cutting the deficit, to support the currency's strength. "Our policy is a strong dollar, we support the strong dollar, a strong dollar is in our national interest. We want to do things to sustain the strength of the dollar, among them is going to the Congress to work on the deficit, to bring the deficit down," Snow told CNBC television. Drossos said "(Snow's) comments along with the more hawkish tone we've heard from the Fed really call into question whether there's unequivocal preference for a weak dollar by U.S. authorities." FED SEEN ON TRACK AFTER PAYROLLS: Even though December U.S. non-farm payrolls growth was slightly below expectations, the market figured the Federal Reserve is still on track to continue raising interest rates further. The Fed is expected to hike rates again as soon as the start of February, bringing them up to 2.5 percent. Higher U.S. rates tend to burnish the appeal of the dollar since they increase the attraction of short-dated dollar deposits to foreign investors. The U.S. economy generated 157,000 jobs in December according to a government report, short of economists' prediction of 175,000. Payrolls growth in November and October was revised higher to 137,000 and 312,000, respectively. "The market couldn't get the euro any higher on the overall positive employment number when taken with the revisions ... and couldn't get through $1.3250, so people bailed out of their long euro positions," said Robert Houck, a euro trader with Wells Fargo in Minneapolis. "The euro's fall below key near-term support of $1.3138 told me that the euro's uptrend against the dollar that began back in October is over," said John Kosar, president of Asbury Research in Chicago. "What just happened today ... means anybody who was long the euro is probably wringing their hands right now," Kosar added. Some traders in New York now say $1.2800 could be the next key target lower for the euro. (Additional reporting by Kevin Plumberg and Jamie McGeever in New York) © Reuters 2005. All rights reserved. Republication or redistribution