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Nothing Big Today– Thankfully!
By Mike Conlon | October 7, 2009
As of 11AM EST, there are no major currency moves to speak of. Thankfully. Volatility has picked up and US dollar weakness has been a major theme. With gold rising to 1050/oz, the doomsday crew and conspiracy theorists are out in full force, suggesting that this could be the end for the US dollar.
It has become apparent to me that the Fed and Bernanke need to do something (raise rates even a token 25 bp) to defend the dollar, even at the risk of a housing price decline. While this move may not be popular here in the US, it would be welcomed by the rest of the world.
Because as of right now, it looks like the US dollar could get a whole lot worse. And my experience has taught me that its when things look the bleakest that we should be the most optimistic. So I’m hopeful that the Fed will move soon.
So USD is up marginally today, most probably due to short-covering or what looks like the infamous “dead-cat bounce”.
Also to not is that USD/JPY tested 88 in the over-night session. Many believe that the breach of that level would cause the Japanese to intervene.
Stay tuned– because it looks like the fun is just about to get started!
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