The US dollar seems to be breaking the downward trend that has been occurring over the last few weeks. It has started to move up today. It’s not making any big gains as of yet, but at least it is moving in the right direction for once. I think it is important to pay attention to the stock markets in the United States and around the world to see what is going to happen. I think there is going to be some sort of pull back in the US stock market, but I’m not exactly sure when that will occur though.
It’s tough to call these plays since everything sort of up in the air. For every positive indicator in the market, there is another indicator that is weighing down on it. I’m not saying that we won’t come out of this recession, I just see relatively poor growth, maybe even stagflation.
July 29 (Bloomberg) — The yen and the dollar rose as Asian stocks declined and economists said a report will show orders for U.S. durable goods fell last month, curbing demand for higher-yielding assets.
The Japanese currency also advanced amid speculation domestic investors are repatriating earnings. The Australian dollar fell from near its strongest level this year against the U.S. currency. South Korea’s won ended a two-day advance as the Shanghai Composite Index led a decline in the region’s stocks, tumbling the most in eight months.
“With equities softer, risk currencies are coming off and the dollar and the yen are benefiting,” said Daragh Maher, deputy head of global foreign-exchange strategy in London at Calyon, the investment-banking unit of Credit Agricole SA. “Anything that suggests expectations for growth in China are lower today than yesterday is going to hit the risk currencies.”
The yen strengthened to 94.73 per dollar as of 10:50 a.m. in London, from 94.55 yen yesterday in New York. It was at 133.96 per euro from 133.95. The euro fell to $1.4143, from $1.4167 yesterday. The 16-nation currency traded in July in a range of $1.3833 to yesterday’s high of $1.4304, the strongest level since June 3.
Australia’s currency fell to 82.00 U.S. cents, from 82.68 cents yesterday, when it rose to 83.38 cents, the highest level since Sept. 29.
The Canadian dollar also ended it’s 7 day rally yesterday. Surprisingly the Loonie only fell 1/5 of a cent, even though oil took a dive. That’s good news for the Canadian dollar and economy.
July 28 (Bloomberg) — Canada’s dollar was little changed against its U.S. counterpart, after rising for seven straight days, as stocks and crude oil declined and traders speculated recent gains in the currency may have outpaced economic growth.
The Canadian currency, nicknamed the loonie, earlier touched the strongest level in almost 10 months before tumbling after a report showed U.S. consumer confidence dropped in July more than economists forecast.
