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US Dollar: Strongest Rally in 2 Years
Yesterday we had the strongest one day jump in the USD/EUR since 5/2005. A number of factors can be added to the move some of them could be strong consumer prices, Lufthansa’s taken over of a stake in JetBlue (acquisition) and basically all sort of general risk aversion. Although it's important to take in mind that the sudden rise began at the European open and only exacerbated after the US numbers. The tide turned for the dollar two days ago when the producer prices and retail sales came out much stronger than expected (xmas?). the consumer prices was only validated throughout the strong inflationary pressures that we all know the United States economy is facing since the war in Iraq and For the Federal Reserve.
Lehman Brothers suggested better than expected fourth quarter results while Citigroup announced plans to save seven bounded investment funds.
Looking forward the USD would probably continue to rise in sudden moves (rally) as year end position unwinding takes hold of the markets.
USD is strong enough for the moment to buy and hold at least until the end of the year to come.
06:06
Posted on Dec-17-2007
