Dollar Sinks to Record Low for Third Day

[UpInArms]

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=6918764

LONDON (Reuters) - The dollar sank to an all-time low versus the euro for a third consecutive day on Thursday and fell to a 4-1/2 year trough on the yen, hit by concerns about U.S. deficits and the view Washington is happy to see a weaker currency.

Warnings from Japanese and European policymakers did little to halt the dollar's slide, which accelerated last week after Federal Reserve chairman Alan Greenspan said U.S. deficits were unsustainable and appetite for U.S. assets was bound to dwindle.

"We have moved into a new stage of the dollar decline and (the dollar's fall) has become one of the policy tools policymakers use. The move is very much a full-fledged policy event. Until policymakers truly protest, what's going to stop the trend?," said Jim McCormick, head of foreign exchange research at Lehman Brothers.

<snip>

Also pressuring the dollar against the yen was speculation that China may decide to revalue the yuan in the next few days.

The talk mounted on Thursday with the premium on the yuan in the offshore market surging to its highest in more than a year with some analysts saying Beijing could reach a decision at an annual high-level economic meeting this weekend.

...more...

and for the current value of the dollar, go here:

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 82.15 Change -0.57 (-0.69%)

Settle 82.41 Settle Time 07:36

Open 82.28 Previous Close 82.97

High 82.46 Low 82.01

Last tick: 2004-11-25 08:23:34 ET
30-min delayed quote.

[0007]

1. Help! The U.S. is sinking out of sight while we watch the

big basketball fight and listen to junior tell us elections will be held in peaceful Iraq in January.

[Scooter24]

2. It pays

to own the Euro right about now...

[luaneryder]

3. Anyone buying Euros?

There are tons of sites for online purchases, but I'd like to hear some personal experiences from DU'er who've done this.

[Kolesar]

4. There are equity mutual funds based on European investments

I searched out a few at www.fidelity.com

I have a bit of a holding in Fidelity Diversified International fund, FDIVX.

[CabalPowered]

17. I started playing with a demo account..

Went long on the euro and in 3 weeks doubled my (fake) money..!

http://www.fxcm.com/

[djack23]

25. I'm investing in the fact the Euro will rise against the dollar

Through intrade.com . Making some good returns. I am predicting 1.35 dollar to the euro by New Year's .

[Deja Q]

5. 59+ million plus 1 are to blame.

They voted for the 1. And the 1 is unrealistic, if not just naive.

Still, if the dollar falls, that means that his wealthy buds will be just as poor as the rest of us.

[FloridaPat]

6. I'm buying euros and gold. This is criminal what * is doing to the

economy. One report said he is getting even with Old Europe for not supporting the invasion. This might stop the jobs from going overseas. But everything we import is going to be more expensive. What worries me is that we are the largest importers in the world. Helps to not make much. China is growing and getting materialistic. Russia is dumpling dollars. I heard China too. Europe is looking for a market which might disappear if our dollar gets too low.

What happens if China unpegs to the dollar and starts importing from Europe? We are taken out of the picture.

We have the biggest military in the world and the most idiotic leader in the world. Ok, maybe not quite as bad as the N. Korea guy. I do believe we are at economic war with the rest of the world because of our policies. Be prepared for the worst.

[Deja Q]

7. No domestic production = dollar crashes. When dollar crashes,

who will Bush bomb?

[ilovenicepeople]

39. ARNIE LAND? State of the Savior

[aneerkoinos]

18. For many years

China has been importing more goods from Europe (and Japan) than US. This year the whole EU-China trade volumes surpass US-China trade volumes.

For one thing, if China unpegs from dollar and pegs to basket of currencies, they have no formal reason to keep buying dollars (buying US bonds) to keep currency parity, and the same goes for other Asian central banks.

Because of continually record breaking current account deficits US needs obscene amounts of capital flows from abroad to finance the debt and keep interest rates low. Private flows have already turned negative to US, and what is keeping the ship barely floating are Asian central banks. If China unpegging means that they stop supporting the dollar and buying US bonds, which it very likely means, the shit hits the fan for you guys.

Joint action from IMF, G8, G20, Geebus to save US from total collapse? First of all, US is too big to save. All working together might slow down the process, but Bush isn't really that popular so the idea is spreading that if it sinks, let it sink, rats shall jump the ship and build a raft. Snow giving the finger to euros who suggested cooperation to control the dropping rate of dollar helped spread that idea, I'm pretty sure.

[DBoon]

21. Getting even?

Destroying the US economy to "get even"?

This is almost as frightening as the fact that so many sheep voted for him.

Did I just see a rhinoceros run by?

[fishnfla]

31. yes getting even

the foreign countries that own our record debt, own it in dollars, when the dollar sinks, they are losing money. that is how I heard it explained.

also a falling dollar helps american manufacturers with overseas exports, so i imagine Halliburton is getting by on this somehow.

[Delphinus]

43. Importers - what do we export?

Hi FloridaPat,

I agree with your statement that we are the largest importers in the world. Which makes me wonder ... other than crops, what do we export? What do we manufacture anymore that goes overseas?

[area51]

47. Q: What do we export?

A: Jobs.

(You knew that was coming, didn't you?)

[FloridaPat]

8. There is also the big problem of oil being paid in dollars.

Everyone but Iraq wants to switch to euros. The day that happens our economy collapses. Some believe that because Iraq switched to euros, that's why we invaded. The world knows we are after all the Middle East oil. They also know we'll be stingy. They are not going to sit back and let that happen.

Someone said that China has billions in dollars and won't let their banks get into trouble. Well, if you wanted to defeat someone, but didn't want to spend the trillions we're doing and the loss of life, wouldn't it be cheaper just to throw the dollars away? They have the manufacturing plants now. The are needing more oil every day.

I really think we're screwed and we can thank all those compassionate conservative for this.

[Deja Q]

11. If that's the case, nukes will eventually have to be used.

The world can't gang up on us via other means.

Our dollar may become worthless, BUT we have our existing stockpiles and artillery. And people so blind to reality that they'll drive the tanks and wield the guns in our name.

[DBoon]

23. Our military wouldn't get very far without imported oi

or any number of items that are no longer made domestically

[Deja Q]

26. Ultimately, but earlier on we'd still have an offensive and we do have

Iraq's oil.

The future is hard to tell. I can only hope it doesn't get worse.

[54anickel]

9. GACK!!! Low of 82.01?!?!?!!!

Meanwhile gold broke the phsycological $450 mark. Good thing US markets are closed? Still trying to push it back down though.

Last trade 450.4 Change +1.4 (+0.31%)

Open 449.0 Previous Close 449.0

High 452.5 Low 448.8

Bid 450.4 Ask 451.3

[UpInArms]

14. lots of pressure going on out there

read where the president of OPEC stated that he wouldn't change from the dollar to the euro - but with just the discussion of such and with the denial issued, you have to know that it is definitely being contemplated.

checked on the euro price on gold for that 350 euro mark - but the KitCo site didn't have it priced in euros :(

[54anickel]

15. Think it's in that chart at the bottom on the kitco page - click details

in the upper right corner of the last chart on the home page.
Isn't that 339.36 in euros, or is that still dollars?

[aneerkoinos]

20. 339.22 euros/ounce now. :)

No need to click details, third column from right.

I don't think gold will break that euro barrier in long time, at least not before euro-dollar pair stalls next time for several months (1.38?), if it stalls...

[UpInArms]

41. took a big dump at 5:00 EST - now at 81.83

Last trade 81.83 Change -0.57 (-0.69%)

Settle 82.18 Settle Time 16:36

Open 82.28 Previous Close 82.97

High 82.09 Low 81.81

Volume 1,738
Add DXY0 to my INO Portfolio

Last tick: 2004-11-25 17:06:11 ET
30-min delayed quote.

http://quotes.ino.com/chart/?s=NYBOT_DXY0

[54anickel]

49. Well now, THERE'S an achievement! Sheesh, this is going a wee bit

fast, don't you think? Looks pretty steep on the 1 year chart.

[loudsue]

10. Eeeewwww. Look at that LOW..... 82.01 .... Someone jumped in just in time

Just in time to keep it from going below 82.

Thanks UIA !! One of our Marketeers is on the job EVEN ON THANKSGIVING!!!

Happy Turkey Day!! :hi: And thanks for the update!

In this world where bush is king and the neocons are nazis, at least we have DU to be Thankful for!!!

:kick:

[UpInArms]

12. Happy Thanksgiving, loudsue!

(almost typed "Tanksgiving" :) )

It will be an active monetary weekend even if our markets are closed - lots of meetings going on in the world and the outcome of those will affect us all.

How I hate that men in suits can determine the fates of so many without any connection to any of us :(

Hang in there - it's going to be a bumpy ride :hi:

[54anickel]

13. Dollar Drops to Record; UBS, JPMorgan, Merrill, Lower Forecasts

Wonderful! :eyes:

http://www.bloomberg.com/apps/news?pid=10000103&sid=aGl3G6PRuboU&refer=us

Nov. 25 (Bloomberg) -- The dollar declined to $1.32 against the euro for the first time as UBS AG, JPMorgan Chase & Co., Merrill Lynch & Co. and Deutsche Bank AG reduced their forecasts for the U.S. currency.

``For each currency you have to ask what is the biting point when the negative impact of the currency appreciation will dominate,'' said Alex Patelis, Merrill's head Group of 10 currency strategist in London. ``For Europe that is somewhere between $1.35 and $1.40, and for Japan it's 90 and 95 yen.''

snip>

``We are increasingly dependent upon an inflow of foreign capital,'' said Paul Volcker, a former chairman of the Federal Reserve, in an interview with PBS television late yesterday. ``The problem is how long can this go on,'' he said. ``When something happens it tends to go further than you imagined and that's the history of financial crises.''

`Enough Is Enough'

The four banks account for 34 percent of the $1.9 trillion-a- day currency market, according to Euromoney magazine. Merrill yesterday cut its March forecasts for the dollar to 96 yen and $1.39 from 100 and $1.33. JPMorgan today cut its estimates to 96 yen and $1.37 per euro in March, from 100 and $1.30 before.

UBS, the world's largest currency trader, lowered its three- month dollar projections yesterday to 103 yen from 107, and to $1.36 per euro from $1.30. Deutsche Bank expects the dollar to weaken to $1.43 per euro and to 93 yen by the end of 2005, from previous forecasts of $1.37 and 99 respectively.

``The dollar has to fall to a level where policy makers start to say enough is enough, but we don't believe that is going to happen for some time,'' said Paul Meggyesi, a currency strategist at JPMorgan in London.

more...

[JNelson6563]

16. Wow! This whole thread is interesting & scary!

Thanks UIA and 54! All the comments were great too.

Wow, some very alarming news indeed. With psychological barriers being smashed all over the place there's no telling where things might go.

Considering the Mayberry Machiavellis have demostrated a clear lack of foresightedness, you can be sure this current strategy isn't very well thought out. All based on preconceived notions, not serious analysis. Arrogant fools.

I hope everyone gets to be with someone they love today! :hi:

Julie

[jmcgowanjm]

19. Add the Ukraine to frisson-Russia will let go of Abkazia

before the Ukraine.

[54anickel]

29. This year, I am most thankful for....

the long weekend for most of the traders! Perhaps the markets will cool down by the time everyone gets back in the swing of things come Monday.

Either they'll cool down ro they'll hit the market with a lot of pent up frustration. :evilgrin:

Monday will be an interesting watching day, or should that be witching?

Happy Thanksgiving Julie and all! :hi:

[aneerkoinos]

24. Happy tanksgiving, Nickel!

Here's a riddle for you: guess what is the fastest way to burn all excess debt?






















50% interest rates, everybody goes bankrupt, no more debt.

Capitalism is self-destructive... :D

[54anickel]

28. ACK!!! Thanks Aneerkoinos, I think? Oh well, today is our big

Thanksgiving, guess I can give thanks for at least having a heads-up on what might be coming down the shit-pipe! :hi:

[aneerkoinos]

30. Those headlights

sure look interesting... and it's fun to compare notes on what they look like ;D

[Barkley]

42. Profit of Doom!

Why are they (Greenspan and Volker) talking about depression econoimcs now after the election is over?


``We are increasingly dependent upon an inflow of foreign capital,'' said Paul Volcker, a former chairman of the Federal Reserve, in an interview with PBS television late yesterday. ``The problem is how long can this go on,'' he said. ``When something happens it tends to go further than you imagined and that's the history of financial crises.''

[Minstrel Boy]

22. Canadian dollar trading at a 12-year high against the American.

At last check, the Canadian dollar was trading at 84.85 cents (U.S.), up from Wednesday's close of 84.72 cents. Early in the session, the loonie moved as high as 85.10 cents, its best level in 12 years.

The gains came as the U.S. dollar continued its freefall on world markets. Overseas, the euro hit $1.32, its highest level on record against the U.S. currency. U.S. financial markets were closed for the Thanksgiving holiday.

Merrill Lynch, Deutsche Bank and JP Morgan Chase have all trimmed their forecasts for the U.S. dollar, citing imbalances in that country's economy.

The U.S. dollar was also down against other currencies, hitting its lowest level in nine years against the Swiss franc and a 16-year-low against the New Zealand dollar.

http://www.theglobeandmail.com/servlet/story/RTGAM.20041125.wdoll1125/BNStory/Business/

[joeybee12]

27. I meant to ask, because it appears as if there's no connection between

the US dollar and the Canadian dollar--we're falling, and they're rising. I know our currencies are not pegged together in any way, but wasn't sure that there was any kind of correlation that would make both either rise or fall at the same time. Apparently not.

[Wright Patman]

32. Canada is rich

in natural resources. The natural resources-based economies are doing really well right now.

Even though they are always accused of being too socialistic, there's one huge government program they basically don't have to deal with, and it is one that will increasingly be seen as an albatross around the U.S. economy's neck, and that is their lack of a socialistic military-industrial complex.

[RebelYell]

33. Gold is over $451 today

Went up $2 overnight

[teryang]

34. Look at the bright side, pay back creditors with cheaper

...dollars. That is the plan isn't it?

[AP]

35. Creditors are going to raise interest rates and prices will go up too.

There's really no bright side unless you have a lot of cash and plan on buying up the assets of bankrupt people poorer than you are.

[teryang]

36. This will hurt secured creditors with fixed rates

Therefore banks will be hurt. You are right about increased prices. People with adjustable rate mortgages will be hurt also.

As William Greider points out in his book Secrets of the Temple, inflation helps debtors and hurts creditors. This is why creditors of the United States want to get out.

[Tight_rope]

37. All the money Bushco has stolen is not worth much anymore!

[Spazito]

38. You can bet that the bush crime family and their cabal...

have safely taken their loot elsewhere, in euros, foreign property, etc.

[belab13]

40. Any thoughts on the Fed's Dec 14th meeting and the projected rate hike

If Greenspin has one ounce of sense left him he'll surprise and raise a half a basis point.

[Yavin4]

44. He Should, But He Won't Do It

If he did raise it by 50 basis points, it would set off a panic on Wall Street because the conventional wisdom is that he'll raise only by a quarter point.

[mmonk]

45. Greenspan will let inflation rise

I'm betting. To raise interest rates fast will cause a credit disaster. This will be good for American companies overseas. It's going to hurt foreign companies here. Brussels at some point will have to do something for EU companies here because they are paid in dollars here while US companies abroad are being paid in euros which is trading for more dollars back home. I'm beginning to wonder if this is a game of chicken.

[Lydia Leftcoast]

46. The yen has fluctuated a bit over the past week, but

the general trend for the dollar is a downward slope with a few blips in it.

[mmonk]

48. Whatever you do,

don't buy long term treasuries right now.

[TeeYiYi]

50. kick

TYY:kick: