Dollar ticks downward to new low against the euro (Tue 12-30)

[RamboLiberal]

http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2003/12/30/financial1451EST0180.DTL

The dollar's hit a new low mark against the euro Tuesday on persistent worries over the U.S. trade and budget deficits.

Tuesday's record of $1.2562 per euro topped a day-old record of $1.2511 for the 12-nation currency, which on Monday rose above $1.25 for the first time in its five-year history.

In late New York trading, it took $1.2549 to buy one euro.

"This is year-end drag and people are not going to fight a trend," said Kevin Lawrie, vice president of Mellon Bank in Pittsburgh.

The latest U.S. economic news offered little support for the dollar. The Conference Board said its consumer confidence index, a key measure of consumer sentiment, slipped to 91.3 in December, lower than economists had forecast. Some pullback had been expected following a surge in November to a revised 92.5, its highest level in more than a year. Analysts had forecast the index would come in at 92.2.

[Bandit]

1. Let's hope Soros uses his profits to help bring down this cabal

Soros and Buffet are going to make a huge bundle on the poor health of the American dollar. I only hope they spend it wisely.

[54anickel]

2. Hell-o??? How can someone make a statement like this, and yet be

stupid enough to shrug it off as if the trend means nothing!

"There was some disappointment with the numbers," said Sean Callow, currency strategist at New York-based IDEA, a global financial research firm. "The thing is that when you get disappointing news, the dollar falls and when you get good news, the market just shrugs it off."

Geez, whether good news or bad, NOBODY is interested in picking up a dollar!!! Hell-o!?!?

It's like that poor penny, laying on the sidewalk, about the only person that bothers to bend down to pick it up is the supertitious that believes it will bring good luck, that is it's only true value.

[Art_from_Ark]

3. I owned a stock like that once

It would always fall on bad news, but even when there was "good" news, the "market just shrugged it off". It turns out there was a reason for the shrugging-- the company was being less than candid about its performance, and the insiders knew while the outsiders were being encouraged to hold, to their ultimate detriment.

I hope this is not the case with the dollar.

[54anickel]

4. I am afraid that is EXACTLY the case with the dollar. n/t

[pinto]

5. this is like the neighborhood store, lagging, desperate for business,

cuts stock to cut costs, loses business 'cause there's nothing to buy, then cuts prices to stimulate business for ......we can't continue to export McDonald's.

[RainDog]

6. Reagan also had a weak dollar

does anyone know the rate of the dollar to, say, the Frank and Mark back then?

[Art_from_Ark]

10. Reagan was more interested in a weak dollar vs. the yen

He pressured the financial markets and the Bank of Japan to pump the yen up in an ill-advised attempt to reverse the trade deficit with Japan by selling more American goods to Japan and making Japanese goods in the US more expensive. As a result, the yen shot up from about 250/dollar to 160/dollar in the course of a few weeks. However, what he had failed to anticipate (he was no economic Einstein, after all) was that the Japanese produced superior quality products that were in direct competition with American goods in America, and that price alone was not a selling point in Japan. As a result, the weak dollar/strong yen mostly exacerbated the trade deficit*

*although, as a small consolation, it did encourage more Japanese tourists to come to the US to take advantage of the lower cost of hotels and transportation.

[cliss]

7. Why do I get the feeling

that our new secretary of the treasury, Snow, doesn't give a shit about the dollar going down the toilet?

He recently had a press conference, and he seemed to talk out of both sides of his mouth. He said they were going to support a "strong" dollar, but they were not going to do anything to support it.

Meaning, they are going to stand by and watch the dollar go down. I'm not sure why they feel this is OK. There are A FEW beneficial repercussions from this, but MANY MORE bad results. Maybe those brain-damaged fools think the miniscule good things are actually good.

Here are some of the "good" results from the dollar falling:

1) the dollar is worth crap, so Americans can't go overseas on vacations because foreign currency is now very expensive. Staying at a hotel in Paris costs $175 instead of $125 per night. The price didn't go up, the exchange rate went down.

2) Foreigners will flock to the US with their vacation money because their money is worth more and US stuff is mucho cheap, so they will buy lots of stuff and travel.

3) Americans can't import very much because anything that comes from a foreign country is now MUCH more expensive. (see #1). So our balance of trade will improve. We're a huge debtor nation to the rest of the world, and it's killing us in our balance of payments.

4) Our stuff is now cheaper, so we'll hopefully export more to other countries.

If they think this is a remedy, they are crazy. It's like killing the patient to save him.

But don't count on BeelzeBush to figure this out.

[Yavin4]

12. Foreigners will flock to the US with their vacation money because their mo

In Central Park, NYC over the holidays, there were packs and packs of European tourists.

[54anickel]

8. It's at 1.2572 right now. The buck is at 86.82

Doesn't look like the BoJ or anyone else is going to jumping in to prop it up anytime soon.

[54anickel]

9. I can't help posting this link to what's gotta be a freeper magazine

Maybe cheerleading like this helps to explain why the markets are so exuberant!

http://mensnewsdaily.com/archive/newswire/nw03/talonnews/1203/121203-economy.htm

Report: Best Economic Growth Since Reagan Expected in 2004
By Jimmy Moore
Talon News

Building on the robust 8.2 percent economic growth in the third quarter that some claim resulted from President George W. Bush's tax cuts, a business forecasting group predicts that the U.S. economy will exhibit the largest rate of growth in 2004 since Ronald Reagan was president two decades ago.
snip>
Regardless, consumer spending, which has been a major reason for the growth in the economy during the latter half of 2003, will be up 4.7 percent in 2004 and 4.3 percent in 2005, according to the report. Consumer spending in 2003 is estimated come in at 3.2 percent.
snip>
The report also finds that business spending in 2004 will be up sharply at 11.7 percent and another 8.6 percent in 2005, significant increases over the estimated 2.7 percent in 2003.

Another finding in the group's report is that the dollar will increase in value by 12.6 percent against the euro in 2004, despite the fact that the euro is currently trading at $1.22 against the dollar. The Conference Board believes the euro will fall to 97 cents in 2004 compared with the $1.11 average in 2003.

"For all the concern about a weak dollar, the dollar will be worth more than the euro by the end of <2004>," Fosler predicts in a statement.

:eyes: :eyes: :eyes:

[Dirk39]

11. Don't get hysterical...

Hello from the land of the strong Euro!

1. The dollar is low to prevent something worse than a low dollar: deflation

2. The dollar is low, because the Bush-administration wants revenge: a low dollar makes exports much more expensive. Most european nations, esp. Germany, are highly dependent on exports - "we" are export-nation Nr. 1. If the dollar is low, it weakens the german and other economies.

The real problem seems to be somehow: noone is more dependent from imports than the USA. If the european nations would realise this, they wouldn't be afraid of a weak dollar anymore, they would simply use their power against the USA: trade deficit might be well-known in the USA.
But till today, no european nation has used this tool.

I'm not sure about what will happen in the near future, but a weak dollar doesn't mean much and a weak dollar is a decision of the federal banks in the USA - as federal or not they might be - it's not a "natural disaster" it's a decision.

If someone knows more about economy than I do, I would be happy to read his reply, esp. from someone, who understands more about deflation than I do:-)
Hello from Germany,
Dirk