Alan Greenspam - foreign Exchange Markets - Us Economy

[limerickman]

I have been tracking the dollar valuation closely for the past couple of weeks,
with particular interest.

It is my feeling that the Euro is now the international currency of reserve and not the dollar.
And here's why.

The last couple of weeks has shown the US dollar to fluctuate wildly on the exchange markets.

Approximately a fortnight ago - the US dollar was trading at 1.31 against the euro.
It had slowly begun to move back from the all time low of 1.36 after (European) currency traders cashed in their positions for the six months to 31 Jan 2004.
This meant that they bought dollars - which made the dollar appreciate in value.

Last week, the dollar actually started to appreciate moving to 1.30, 1.29, 1.28, and last Friday, it hit 1.27.
The reason for this, in part, was down to the US goverment decision to give US companies a once-off tax holiday on all repatriated profits of US companies for 2005 (see J&J repatriating all it's profits to avail of this tax break).
Also Mr.Greenspam made some very optimistic noises about budget deficit
measures being adopted by Bush & Co and talk of more interest rate increases
in the USA.
I would have thought that all of this good news, was going to give the greenback some momentum.

This week all the gains made by the dollar to last Friday have been whittled away - and the greenback trades at 1.31 again.
A drop of four cents in 4 days.

Seems that the international markets know that the structural problems in the US economy are evident.

 

[zapper]

I have been tracking the dollar valuation closely for the past couple of weeks,
with particular interest.

It is my feeling that the Euro is now the international currency of reserve and not the dollar.
And here's why.

The last couple of weeks has shown the US dollar to fluctuate wildly on the exchange markets.

Approximately a fortnight ago - the US dollar was trading at 1.31 against the euro.
It had slowly begun to move back from the all time low of 1.36 after (European) currency traders cashed in their positions for the six months to 31 Jan 2004.
This meant that they bought dollars - which made the dollar appreciate in value.

Last week, the dollar actually started to appreciate moving to 1.30, 1.29, 1.28, and last Friday, it hit 1.27.
The reason for this, in part, was down to the US goverment decision to give US companies a once-off tax holiday on all repatriated profits of US companies for 2005 (see J&J repatriating all it's profits to avail of this tax break).
Also Mr.Greenspam made some very optimistic noises about budget deficit
measures being adopted by Bush & Co and talk of more interest rate increases
in the USA.
I would have thought that all of this good news, was going to give the greenback some momentum.

This week all the gains made by the dollar to last Friday have been whittled away - and the greenback trades at 1.31 again.
A drop of four cents in 4 days.

Seems that the international markets know that the structural problems in the US economy are evident.

Hey thanks for the report...I find it refreshing that I don't have to watch the news anymore, I can just read through your posts...However, I would appreciate it in the future if you would include a weather report along with your economic news...

 

[birdman23]

Yep the dollar is struggling but don't be too quick to judge Lim. Look what the Euro has been doing for the last three months

 

[limerickman]

Yep the dollar is struggling but don't be too quick to judge Lim. Look what the Euro has been doing for the last three months

Nice try, Bird.

Your co-hort Ted Baxter does the weather reports, not me.

That's a great graph you supplied, but as ever it's half the picture.

Euro/USD : €1 = $0.89 at December 2003.
In early 2004, USD moved to parity $1 = €1.

Since then, the dollar has fallen progressively : $1.05, $1.10, $1.15 - hitting $1.36 before X-Mas 2004.
That's a 35% depreciation in value in 14 months.
Today it's at $1.31 (according to Bloomberg).

Seems the US Fed has been on it's knees in China begging the Chinese to
unpeg their currency from the dollar.

Zapper and co worry about the US being on it's knees to BinLaden - the men from the East, told Greenspan and Snow where to go.

 

[limerickman]

Yep the dollar is struggling but don't be too quick to judge Lim. Look what the Euro has been doing for the last three months

Don't take my word for it : here's what the Financial Times says

http://news.ft.com/cms/s/0b414340-80d4-11d9-adb4-00000e2511c8.html


Sentiment veers away from dollar
By Steve Johnson in London
Published: February 17 2005 11:18 | Last updated: February 17 2005 18:02

The US dollar resumed its downward spiral on Thursday, handing back the gains it had made as Federal Reserve chairman Alan Greenspan addressed a Senate committee on Wednesday.

The dollar had spiked higher as Mr Greenspan's comments that real US interest rates remained “fairly low” led some observers to pencil in faster monetary tightening.

However, sentiment turned against the dollar on Thursday despite strong data from the labour market, with new jobless claims tumbling to 302,000 in the week to February 12, the lowest reading since October 2000.
The dollar's renewed slide was set in train by a growing consensus that Mr Greenspan was not really saying anything new. (bit like Zapper !)

“Chairman Greenspan's semi-annual testimony has failed to give the market any new clear direction with his speech well-balanced and broadly in line with expectations,” said Derek Halpenny, senior currency economist at Bank of Tokyo-Mitsubishi.

“There were hawkish hints, but it wasn't hawkish enough to offer real support for the US currency,” added Chris Gothard, currencies strategist at Brown Brothers Harriman.

Thursday's trade data added to the melange of dollar-negative sentiment. Mr Greenspan has suggested that the US current account deficit will narrow as three years of dollar weakness eat into the profit margins of those exporting to the US, forcing them to raise prices and reducing demand.

But Thursday's numbers showed that while import prices into the US rose 0.9 per cent month-on-month in January, when petroleum imports are stripped out the rise was just 0.2 per cent.

With some, such as Steven Englander, chief forex strategist at Barclays Capital, suggesting that geopolitical concerns may still be overhanging the dollar after Wednesday's scare in Iran, the dollar drifted to a two-week low of $1.3082 to the euro, 0.9 per cent off Wednesday's peak.

The dollar also fell to C$1.2296 against the Canadian dollar, a fall of 1.1 per cent from Wednesday's zenith, and 1 per cent to $1.8942 against sterling, although it held steady at Y105.44 against the yen.

The yen dipped 0.4 per cent to Y137.90 to the euro, a one-month low, and 0.5 per cent to Y199.70 versus sterling, a year-to-date nadir.

Following Wednesday's news that Japan had slipped back into recession, yen sentiment remained bearish as Hiroshi Watanabe, the vice-finance minister for international affairs, said the yen's value “is being a little bit overestimated”.

Referring to the likelihood of a near-term renminbi revaluation, Mr Watanabe added “China has given the impression that it won't move soon”. The discount on one-year non-deliverable renminbi-dollar forwards has fallen to a three-month low as speculators shy away from betting on an easing of the Chinese peg.

■ The Swedish krona slipped 0.2 per cent to SKr9.1002 to the euro as core Swedish consumer inflation fell to an annual rate of 0.4 per cent in January, half the previous rate and well below the Riksbank's 2 per cent target.

The data kicked a Swedish rate hike even further into the distance, and led to speculation of a possible rate cut.

“The data mimic the softer Norwegian inflation data released last week and it raises the probability of a Riksbank rate cut,” said Paul Mackel, currencies strategist at ABN Amro.

“Although in isolation we don't yet see the January inflation undershoot as a trigger for a rate cut in Sweden, it nevertheless fuels market speculation about such a scenario,” said Kristjan Kasikov, currency strategist at Calyon.

The Hungarian forint rose 0.4 per cent to a two-year high of Ft242.84 to the euro as tumbling inflation heightened foreign interest in Hungary's bond market

 

[zapper]

Nice try, Bird.

Your co-hort Ted Baxter does the weather reports, not me.

That's a great graph you supplied, but as ever it's half the picture.

Euro/USD : €1 = $0.89 at December 2003.
In early 2004, USD moved to parity $1 = €1.

Since then, the dollar has fallen progressively : $1.05, $1.10, $1.15 - hitting $1.36 before X-Mas 2004.
That's a 35% depreciation in value in 14 months.
Today it's at $1.31 (according to Bloomberg).

Seems the US Fed has been on it's knees in China begging the Chinese to
unpeg their currency from the dollar.

Zapper and co worry about the US being on it's knees to BinLaden - the men from the East, told Greenspan and Snow where to go.

Sorry Felix Unger, you assume too much. As usual, you are presented with evidence of your own shortcomings and it has to be turned into a Europe/world vs U.S. Like I said before, I appreciate the economic news...I don't have to watch the tele but I would appreciate the weather and perhaps some entertainment news...uh, something other than 70's television please..

 

[zapper]

Don't take my word for it : here's what the Financial Times says

http://news.ft.com/cms/s/0b414340-80d4-11d9-adb4-00000e2511c8.html


Sentiment veers away from dollar
By Steve Johnson in London
Published: February 17 2005 11:18 | Last updated: February 17 2005 18:02

The US dollar resumed its downward spiral on Thursday, handing back the gains it had made as Federal Reserve chairman Alan Greenspan addressed a Senate committee on Wednesday.

The dollar had spiked higher as Mr Greenspan's comments that real US interest rates remained “fairly low” led some observers to pencil in faster monetary tightening.

However, sentiment turned against the dollar on Thursday despite strong data from the labour market, with new jobless claims tumbling to 302,000 in the week to February 12, the lowest reading since October 2000.
The dollar's renewed slide was set in train by a growing consensus that Mr Greenspan was not really saying anything new. (bit like Zapper !)

“Chairman Greenspan's semi-annual testimony has failed to give the market any new clear direction with his speech well-balanced and broadly in line with expectations,” said Derek Halpenny, senior currency economist at Bank of Tokyo-Mitsubishi.

“There were hawkish hints, but it wasn't hawkish enough to offer real support for the US currency,” added Chris Gothard, currencies strategist at Brown Brothers Harriman.

Thursday's trade data added to the melange of dollar-negative sentiment. Mr Greenspan has suggested that the US current account deficit will narrow as three years of dollar weakness eat into the profit margins of those exporting to the US, forcing them to raise prices and reducing demand.

But Thursday's numbers showed that while import prices into the US rose 0.9 per cent month-on-month in January, when petroleum imports are stripped out the rise was just 0.2 per cent.

With some, such as Steven Englander, chief forex strategist at Barclays Capital, suggesting that geopolitical concerns may still be overhanging the dollar after Wednesday's scare in Iran, the dollar drifted to a two-week low of $1.3082 to the euro, 0.9 per cent off Wednesday's peak.

The dollar also fell to C$1.2296 against the Canadian dollar, a fall of 1.1 per cent from Wednesday's zenith, and 1 per cent to $1.8942 against sterling, although it held steady at Y105.44 against the yen.

The yen dipped 0.4 per cent to Y137.90 to the euro, a one-month low, and 0.5 per cent to Y199.70 versus sterling, a year-to-date nadir.

Following Wednesday's news that Japan had slipped back into recession, yen sentiment remained bearish as Hiroshi Watanabe, the vice-finance minister for international affairs, said the yen's value “is being a little bit overestimated”.

Referring to the likelihood of a near-term renminbi revaluation, Mr Watanabe added “China has given the impression that it won't move soon”. The discount on one-year non-deliverable renminbi-dollar forwards has fallen to a three-month low as speculators shy away from betting on an easing of the Chinese peg.

¦ The Swedish krona slipped 0.2 per cent to SKr9.1002 to the euro as core Swedish consumer inflation fell to an annual rate of 0.4 per cent in January, half the previous rate and well below the Riksbank's 2 per cent target.

The data kicked a Swedish rate hike even further into the distance, and led to speculation of a possible rate cut.

“The data mimic the softer Norwegian inflation data released last week and it raises the probability of a Riksbank rate cut,” said Paul Mackel, currencies strategist at ABN Amro.

“Although in isolation we don't yet see the January inflation undershoot as a trigger for a rate cut in Sweden, it nevertheless fuels market speculation about such a scenario,” said Kristjan Kasikov, currency strategist at Calyon.

The Hungarian forint rose 0.4 per cent to a two-year high of Ft242.84 to the euro as tumbling inflation heightened foreign interest in Hungary's bond market

Oh yeah...until St. Patricks day...how about dropping the green print...its difficult on the eyes

 

[zapper]

Don't take my word for it : here's what the Financial Times says

Yeah as usual...half of the story Felix...

http://www.bloomberg.com/apps/news?pid=10000087&sid=a4.mQIILnzFY&refer=top_world_news

U.S. Economy: Jobless Claims Decline to 4-Year Low (Update1)
Feb. 17 (Bloomberg) -- The number of Americans filing first- time unemployment claims unexpectedly fell to the lowest in more than four years, supporting Federal Reserve Chairman Alan Greenspan's view that the U.S. economy is growing at a ``reasonably good pace.''

Jobless claims declined to 302,000 for the week ended Feb. 12, the lowest since October 2000, from 304,000 the week before, the Labor Department said today in Washington. The report covers the same week the department surveys businesses for the February monthly jobs figures, suggesting increased hiring. Philadelphia- area manufacturing rose more than expected, the Fed said today.

You must be in the media industry for "gloom and doom" is all you can muster...

 

[birdman23]

Nice try, Bird.

Your co-hort Ted Baxter does the weather reports, not me.

That's a great graph you supplied, but as ever it's half the picture.

Euro/USD : €1 = $0.89 at December 2003.
In early 2004, USD moved to parity $1 = €1.

Since then, the dollar has fallen progressively : $1.05, $1.10, $1.15 - hitting $1.36 before X-Mas 2004.
That's a 35% depreciation in value in 14 months.
Today it's at $1.31 (according to Bloomberg).

Seems the US Fed has been on it's knees in China begging the Chinese to
unpeg their currency from the dollar.

Zapper and co worry about the US being on it's knees to BinLaden - the men from the East, told Greenspan and Snow where to go.

I know, it's half the picture by design. My point was you talked about the dollar dropping 4 cents in a day or somthing to that effect. The picture (or statistics) can always be skewed to point out one's own desired result. But you are correct the dollar is suffering and hopefully it rebounds soon but I don't think that automatically qualifies the Euro as the reserve currency of choice. Just my opinion.

 

[FredC]

I know, it's half the picture by design. My point was you talked about the dollar dropping 4 cents in a day or somthing to that effect. The picture (or statistics) can always be skewed to point out one's own desired result. But you are correct the dollar is suffering and hopefully it rebounds soon but I don't think that automatically qualifies the Euro as the reserve currency of choice. Just my opinion.

I only count my own beans, but with things continuing the way they are at present, steadily declining, how on earth can the dollar rebound? Getting rid of Bush and getting out of Iraq might help steady the ship. Otherwise I think it looks like more of the same for the foreseeable future.

 

[birdman23]

I only count my own beans, but with things continuing the way they are at present, steadily declining, how on earth can the dollar rebound? Getting rid of Bush and getting out of Iraq might help steady the ship. Otherwise I think it looks like more of the same for the foreseeable future.

Good question. One I hope is answered sooner rather than later. Maybe we could convince all countries to go back to the gold standard ha ha.

 

[FredC]

Yep the dollar is struggling but don't be too quick to judge Lim. Look what the Euro has been doing for the last three months

Is that a barograph readout with another deep depression heading for Zaps Virginian house of straw?

 

[FredC]

Good question. One I hope is answered sooner rather than later. Maybe we could convince all countries to go back to the gold standard ha ha.

If that was the case a lot of your bullion would have already been sold to prop up the dollar.
Help, help, wheres Lim?
I made good money importing and selling American Food Processing machinery.
Biro Food Machinery, Marblehead, Ohio. The Hollymatic Corporation. Butcher Boy. The Atlanta Saw co. All top class stuff, I might add. No problems with spares either. Mind you that was in the 70's.

 

[birdman23]

If that was the case a lot of your bullion would have already been sold to prop up the dollar.
Help, help, wheres Lim?
I made good money importing and selling American Food Processing machinery.
Biro Food Machinery, Marblehead, Ohio. The Hollymatic Corporation. Butcher Boy. The Atlanta Saw co. All top class stuff, I might add. No problems with spares either. Mind you that was in the 70's.

True but there is still a huge amount in reserve. I believe FDRoosevelt put that in motion. I know it's idealistic thinking and completely unrealistic but think how much easier things would be if everyone was backed up with gold. No fluctuating currencies.

YOu are a jack of all trades, cyclist, importer, attorney, etc. Anything you haven't done?

 

[FredC]

Sorry Felix Unger, you assume too much. As usual, you are presented with evidence of your own shortcomings and it has to be turned into a Europe/world vs U.S. Like I said before, I appreciate the economic news...I don't have to watch the tele but I would appreciate the weather and perhaps some entertainment news...uh, something other than 70's television please..

You've just reminded me of something. When Walter Matthau died, I asked an old friend Pete Young at Jazz FM ( available on the net) to play the original score by Neil Hefti as a favour, now he's got, and has available from other sources just about everything. He phoned me a couple of days later to tell me that there has never ever been a recording of the theme on disc by Neil Hefti. He was astounded, and so was I. No doubt someone has stuck something together since. Mind he said on air 'Sorry Fred, and everybody this is the best cover version I could find'. Hey, who doesn't like that film?
Now here is the weather for your zone, it will be difficult for the Virginian pigs to take off and fly, their hangar suffered tremendous damage last Friday from the remnants of a storm blown in from the West of Ireland.
The Dow Jones had to offload pork bellies on the futures market due to increased demand from China, which leaves Rib Shack shares at an all time low.
Well folks, stay with us after this for 724 episode of the Beverly Hillbillies, and 602 of funnyman Bilko.
Don't y'all wish our troops could have the same fun.
This schedule is for old friend Zapper, who is suffering from foot in mouth, and swine vesicular disease. You might be having a tough time, but he's having a rough time. Give it up and whoop for Zap.

 

[FredC]

True but there is still a huge amount in reserve. I believe FDRoosevelt put that in motion. I know it's idealistic thinking and completely unrealistic but think how much easier things would be if everyone was backed up with gold. No fluctuating currencies.

YOu are a jack of all trades, cyclist, importer, attorney, etc. Anything you haven't done?

I'm not an attorney (Barrister), my other bit is. I'm a magistrate.
Anything I haven't done? Yep, win the Tour de France.
Now listen here, when you get as old and decrepid as I am. You can always say that whatever you did you stuck at it and gave it your best shot.
You're getting too bloody nosey.
What's difficult about importing things?
What's wrong with having brains?

 

[birdman23]

I'm not an attorney (Barrister), my other bit is. I'm a magistrate.
Anything I haven't done? Yep, win the Tour de France.
Now listen here, when you get as old and decrepid as I am. You can always say that whatever you did you stuck at it and gave it your best shot.
You're getting too bloody nosey.
What's difficult about importing things?
What's wrong with having brains?

Sorry your honor (Or is it "your magistrate" over there?).

Not nosey just observant. I am curious because I am considering a career change and going back to law school.

Nothing difficult about importing but it is good business and I do well with importing products from Asia (something in common)

Nothing wrong with having brains. I have dabbled in many different arenas myself and I find it interesting to see what others have done.

I meant jack of all trades as a compliment.

 

[FredC]

Sorry your honor (Or is it "your magistrate" over there?).

Not nosey just observant. I am curious because I am considering a career change and going back to law school.

Nothing difficult about importing but it is good business and I do well with importing products from Asia (something in common)

Nothing wrong with having brains. I have dabbled in many different arenas myself and I find it interesting to see what others have done.

I meant jack of all trades as a compliment.

No it is not, it is the common courtesy title of 'Sir' or 'Madam' when addressing 'The Bench' and it's constituent members. And not you old **** as some of little twats refer to us. That means that they get a worse deal.
The bar is different.................zzzzzzzzzzzzzzzzzzzz

 

[birdman23]

No it is not, it is the common courtesy title of 'Sir' or 'Madam' when addressing 'The Bench' and it's constituent members. And not you old **** as some of little twats refer to us. That means that they get a worse deal.
The bar is different.................zzzzzzzzzzzzzzzzzzzz

If that's what they call their judge then I would say they deserve a worse deal. How is the bar different? I don't understand that part.

 

[limerickman]

Yeah as usual...half of the story Felix...

http://www.bloomberg.com/apps/news?pid=10000087&sid=a4.mQIILnzFY&refer=top_world_news

U.S. Economy: Jobless Claims Decline to 4-Year Low (Update1)
Feb. 17 (Bloomberg) -- The number of Americans filing first- time unemployment claims unexpectedly fell to the lowest in more than four years, supporting Federal Reserve Chairman Alan Greenspan's view that the U.S. economy is growing at a ``reasonably good pace.''

Jobless claims declined to 302,000 for the week ended Feb. 12, the lowest since October 2000, from 304,000 the week before, the Labor Department said today in Washington. The report covers the same week the department surveys businesses for the February monthly jobs figures, suggesting increased hiring. Philadelphia- area manufacturing rose more than expected, the Fed said today.

You must be in the media industry for "gloom and doom" is all you can muster...

5.2% unemployment, as at 4th February 2005. Here's the link.
http://www.bloomberg.com/markets/index.html#results

This only includes those who claim welfare to 4th February 2005.
Those who are unemployed longer than 6 months, aren't in the 5.2%.

Hey, Oscar Madison, what was the jobless rate under Clinton ?
3.5%.

Still everything rosy over there, ain't it ?