Wobbly Dollar puts Asian economies at Risk

jakojako777

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You have your own opinion and I have my own opinion on this topic.

I shall stand by my point that the Dollar is not going to fall and only time will decide the outcome of the Dollar and the world currency.

No problem I respect every bodies opinion ! Of course I don't agree with you
Gold price just went down to almost 1160$ ounce !
I STILL am convinced that in moth from now Gold will reach up to 1300$ and continue to rise!
That is 140$ up in only one month!
Just come back in month and tell me that I was wrong...... :)

.......
 

sob

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Another report of Dollar surging to a one year high against the Japanese Yen

FOREX-U.S. dollar soars vs euro, yen, buoyed by jobs data

The dollar on Friday posted its best performance against a basket of currencies in nearly a year after data showed the United States lost far fewer jobs than expected last month, bolstering hopes the economy is on a stable path to recovery.

Employers cut 11,000 non-farm jobs last month while markets had expected job losses of 130,000. The surprisingly strong report stoked speculation the Federal Reserve may consider raising interest rates from record lows sooner than initially thought For details,see [ID:nN04320079].

That would increase returns on dollar-denominated assets and make them more attractive again to investors.

"The market is pricing in more scope for changes in Fed policy, meaning, higher interest rates. That's why we're seeing a rally in the dollar," said Paresh Upadhyaya, senior portfolio manager at Putnam Investments in Boston. Upadhyaya helps oversee assets of about $20 billion.

Recent Fed statements about keeping U.S. rates low for an extended period have encouraged investors to use the dollar as a funding vehicle to purchase higher-yield assets.But analysts said the data today forced many traders to cover short-dollar positions and may signal the end of trades that blindly sell the dollar on strong economic news.

"If (signs of a job recovery) continue, you may start to see the dollar rally on strong data rather than the opposite," Mizuho's Eliasson said.
 

sob

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From the above report we can see a slow down in FII inflows into Indian stock markets if the returns from the US markets and assets increase.

The surprisingly strong report stoked speculation the Federal Reserve may consider raising interest rates from record lows sooner than initially thought. That would increase returns on dollar-denominated assets and make them more attractive again to investors.
We can expect some slowing down of the growth in our markets in the near future.
 

jakojako777

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Report from Reuters on Dollar strengthing due to improved job market scenario in the US.

US gold ends 4 pct lower as dollar rallies on jobs
better-than-expected jobs data sent the dollar sharply higher,
:sarcastic::sarcastic::rofl::Laie_46::rofl: This really deserves to be in "jokes" thread!

Perhaps they should stop cheat on their jobless reports before they can start to report ANY RECOVERY on jobs! :stinker:


Like I've said Gold has dropped to almost 1160$ I'm more than convinced that it will be 1300$ or if you prefer 140$ more per ounce in one month !
 

jakojako777

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Are we on the verge of total economic collapse?

better-than-expected jobs data sent the dollar sharply higher,
:sarcastic::sarcastic::rofl::Laie_46::rofl: This really deserves to be in "jokes" thread!

Perhaps they should stop cheat on their jobless reports before they can start to report ANY RECOVERY on jobs! :stinker:


Like I've said Gold has dropped to almost 1160$ I'm more than convinced that it will be 1300$ or if you prefer 140$ more per ounce in one month !
Are We On The Verge Of Total Global Economic Collapse?
Posted Nov 20, 2009 11:13am EST by Henry Blodget in Investing, Recession, Banking, Housing
Related: spy, dia, ^n225, ewj, eem, gle, gld

Are we on the verge of total economic collapse?

Don't laugh. The french firm Societe Generale thinks so.

The brokerage firm has put the fear of God in clients recently by predicting that developed economies and markets are going to collapse under a monster debt load and that gold is going to soar to $6,000 an ounce.

Fortunately, not everyone feels that way.

Many on Wall Street, in fact, have suddenly gotten quite bullish after missing a lot of the extraordinary 65% rally we've had since the lows of March. Hopefully, these folks--the "V-shaped recovery" crowd--are right, and the bad news of the last couple of years will soon be a distant memory.

Aaron and I are skeptical, though. The aftermath of debt-fueled financial crises like the one we went through usually lasts for many years, if not decades. Japan has been struggling to right its ship since its own bubble burst in 1990, and the country still isn't growing strongly again. (Japan's stock market, meanwhile, trades at a fifth of its 1989 high).

With luck, we won't end up like Japan--or the SocGen scenario. We doubt, however, that the economy and markets will just shrug off the last year as if nothing serious happened.

Are We On The Verge Of Total Global Economic Collapse;: Tech Ticker, Yahoo! Finance
 

jakojako777

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SocGen: Prepare Yourself For The Worst Case Scenario!

SocGen: Prepare Yourself For The Worst Case Scenario!


Yesterday, it was reported that analysts at SocGen had sent out a guide on what to do if the world goes completely to hell.

Well, the full report has surfaced, via ZeroHedge, and it's very, very fun if you like doom and gloom.

Basically, they're extremely concerned about public debt, and the effect that will have on developed economies, and they draw extensive parallels to Japan.


SocGen: Prepare Yourself For The Worst Case Scenario!
 

jakojako777

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$4.8 trillion - Interest on U.S. debt

$4.8 trillion - Interest on U.S. debt

Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels.

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.


$4.8 trillion - Interest on U.S. debt
 

sob

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Dollar gains vs euro and yen

The dollar rose against the euro and yen on Friday after reports that Iranian troops had briefly entered Iraqi territory on Thursday and spent several hours at an Iraqi oilfield.

Iraq's deputy interior minister denied the reports but investors were still rattled.

The dollar and the Swiss franc benefit from safe-haven flows in times of uncertainty.

The Swiss franc rose as investors unwound long euro positions in the approach to the year-end, also helped by rumors of a coup in Pakistan that were quickly denied and by stop-loss orders which propelled it higher.

"The Swiss economy and Swiss banking system are traditionally the safe haven," said Joseph Trevisani, chief market analyst at FX Solutions in Ridgewood, New Jersey. "But with thin liquidity it is difficult to tell the source of the movement."

In early New York trade, the euro was down 0.1 percent on the day at $1.4330 after the Iraq reports, down from a peak of $1.4411 hit earlier in the global session as investors bet its recent fall against the dollar had been too far, too fast.

The dollar was down 0.3 percent against the Swiss franc at 1.0446 francs.

The euro was last at 1.4955 francs, down 0.4 pct on the day, and below the SNB's perceived threshold of 1.50 francs at which they will intervene to weaken the Swiss franc.

The euro fell to its weakest level since March when the Swiss National Bank intervened to sell francs after announcing steps to fight deflation.
 

ppgj

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Dollar could resume fall in first quarter of 2010

Gaurav Kapur
Monday, December 28, 2009 2:38 IST


As 2009 draws to a close, the financial market turmoil seen at the start of year has abated and the global economic recovery looks to be on track. However, there is still considerable uncertainty surrounding what may happen in 2010, especially in the currency markets.

The biggest uncertainty facing the markets is the pace at which the central banks, especially in the G4 countries may withdraw monetary support and remove the excess liquidity prevailing in the global financial markets.

The US dollar has strengthened since the start of December against a backdrop of US economic data that was stronger than expected, including a surprisingly robust employment report and upturn in consumer price inflation.

This has encouraged the view that the US Federal Reserve will depart from its ultra-loose monetary policy stance sooner than expected, lessening the attractiveness of the greenback as a funding currency in carry trades.

Before this month's US dollar rally, the sell-off in the currency from March until the end of November was built upon both a rebound in global economic activity and loose liquidity conditions which encouraged strong capital outflows from the safe haven of US government securities into higher-risk assets such as equities, emerging markets and commodity-linked investments.

At the end of 2009, equity markets remain around their yearly highs. This implies that the underlying tone in the market, going into the first quarter of 2010, remains skewed towards more risk-taking.

Moreover, with ongoing economic recovery and the G4 central banks maintaining their accommodative monetary policy stances in the foreseeable future, ample liquidity will ensure that the greater risk appetite driven-carry trades can continue. This suggests some further upside for risky assets in the first quarter of 2010.

However, for the US dollar this means its downtrend will resume. Despite better US data, the Fed won't be in a hurry to start raising rates. Inflation remains subdued and the central bank will want to see how the end of its quantitative measures is absorbed by the market before starting any rate hike cycle.

This suggests expectations will not tighten around Fed rate hikes until later in June 2010. The greenback will struggle to perform well until then. With liquidity thin into year-end, there have been some volatile moves in currency markets over the past few weeks.

While the US dollar has been the main beneficiary, the euro has been a notable underperformer amid fresh worries over the outlook for Greece in the aftermath of the ratings downgrade by ratings agencies S&P and Moody's. The recent announcement of the 2010 Budget in Greece did little to allay fears that the government will not and cannot get a grip on the budget deficit.

However, the downgrade has also raised concerns that Greek banks could become ineligible for the European Central Bank's (ECB) liquidity operations, if the ECB reverts back to old eligibility criteria.

Greek paper may not be eligible for the ECB refinance operations with sovereign rating at BBB+ now, as the central bank normalises these operations. This is very unlikely though going into the next year. Greece is going to have to respond to European Commission demands on the budget deficit, however ultimately the EU and ECB are likely to bail out Greece.

This will be supportive for risk appetite, but the prospect of the ECB having to nurse Greece, as well as other European Union periphery countries, through their growing troubles, does raise headwinds for the euro in 2010.

In the local inter-bank market, the rupee appreciated against the US dollar as capital inflows, especially through the portfolio route picked up over the year and trade deficit narrowed on the back of lower oil prices and generally depressed non-oil imports.

The extent of appreciation was however, muted by the fact that depressed external demand severely affected exports and capital inflows from sources other than portfolio flows remained relatively muted. For instance, external commercial borrowings averaged at around $1.5 -2 billion per month. Moreover, a resurgent US dollar kept the rupee in check too.

The Indian unit appreciated by 3% against the greenback over the year.Going ahead, while bias is towards a weaker greenback in the first half of 2010, prospects for higher interest rates locally and better a growth outlook in this fiscal and the next, could keep the bias for appreciation of the rupee intact.

The extent of appreciation will however, critically depend on capital inflows. But with portfolio inflows remaining the main source of capital inflows, price action in the rupee-dollar pair could see heightened volatility depending on the global investor risk appetite.
That in turn could curb the extent of appreciation of the rupee.

And, with oil prices also having bottomed out and economic activity improving, merchandise trade deficit pressures on the rupee could mount with rising imports. This week, the rupee-dollar pair could continue to trade in the range of 46.40-47.00.

The writer is senior economist, ABN Amro Bank.

Views expressed herein are personal.


http://www.dnaindia.com/money/comment_dollar-could-resume-fall-in-first-quarter-of-2010_1328170
 

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