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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (8967)	1/2/2006 5:50:44 PM
From: robert b furman	Read Replies (1) \| Respond to of 12411

I'm thinking the Dollars strength is primarily related to the demand for dollars: 1) tax breaks for repatriation in 05 - now ended. 2) unwinding of hedged "carry trade" as rates equalize globally.This is a huge demand for dollars. The hedged flows of currencies impact the dollar more than deficits or trade imbalances. The Euro has only had one increase in rates.England and Australia are also slowly starting. Short story is we'll all be at parity as the Asians do any and everything they can to keep their currencies the cheapest and gain the export advantage. Dollar strength could very well be a continuing event if our economy keepd adding jobs and tax receipts continue to grow. Job creation and capital formation have a longterm growth record that could well surprise most (as it has in the past and the Dems are in denial over it),could well diffuse the deficits conversation if Iraq pays for its own defense (huge oil income - very probable). As we wind down the war expense and gpo to work creating technology for global oil exploration - our deficit could be marginal by 07/08. BWDIK Bob