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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 2338
Posted: Feb 22, 2010 5:00
Comments: 2338
Forum Topic:
USD
Discuss USD
The USD does indeed look like it will fail the trendline as it is now under the 50day EMA for the majority of this day, but I also view this as a great opportunity for an explosive USD rally catching many by surprise off what appears to be vulnerable support.
FED created sits there. Possibly some USD trillion. FED laments banks are not lending. In fact as the spreads tell, available credit shrinks. What would happen if banks would suddenly start lending? Inflation. What happens if the FED raises interest thus paying the banks more interest?
The banks won't lend. So what keeps the USD up? Recession. And deflation. It is all written well not in holy textbooks but in Uncle Scrooge comics. In order to keep value of fiat money up it must be stored in a money tank and stay there. Keep jobs scarce and payment low.
This is why I never trade indices. I know there has to be some balance or a sweet spot between deflation and inflation. Given the huge excess liquidity from quantitative easing sitting on bank balance sheets the scale clearly tilts to deflation and USDx consequently towards 85. Neither FED nor US Tsy could want a quick recovery they are planning recovery in a decade. USDx will keep weak vs commodity currencies as long as China piles up commodities. But not longer.
But there have been rumors that Bernanke would discuss the possibilty of removing the "extended period" language. These of course are unsubstantiated rumors but today is a huge day in terms of CPI and Bernanke speak. I am hyped!
The Commerce Department’s sales report is due at 8:30 a.m. in Washington. Economists’ estimates ranged from gains of 0.5 percent to 2.1 percent.
thats why I m asking, or finding out everyones opinion of usd move in aproximately 2 weeks.>!!
my take ist that usd weaker just a bit,,eur above 1,37, gbp(i dont know:-)), aud up, nzd up, and vs jpy (i dont know)