The "We need a strong Dollar" Story
Written by A Forex View From Afar on Thursday, March 13, 2008Back to www.thelfb.com
The "We need a strong Dollar" Story had reached Mr. Bush, after it was said in every possible way and surroundings by Mr. Paulson. Until now though the markets didn't believe the Treasury Secretary, and they won't probably believe Mr. Bush either.
"We have a dollar that’s adjusting, and I am for a strong dollar. One reason I am for a strong dollar is because I want, you know, people to — I think it helps deal with inflation"
If someone had cast a look recently over the Dollar Index, it sits now at 72 points, which is 28% off from '73 value, when the US gave up on the Gold Peg.
What happened to "Low Dollar helps exports" promoted by Mr. Bernanke? Maybe they don't believe that one either.
In the mean time, Fed Funds Future sees a 50 or 75 points rate cut, sending the Dollar a little lower.
Soon we will have a test on the 70 area on the Dollar Index, with the Fed Funds Target at 1%. What story are we going to hear then?
Please add your Comments
| Posted in »
0 comments: Responses to “ The "We need a strong Dollar" Story ”