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Interesting youtube clip.. Commodities and Swiss franks are the way to go according to this guy.



Maybe time for a rebound in the Dollar


Regular readers of this report are aware that I have been expecting US weakness to eventually cycle around to other major global economies, leading to slower growth elsewhere and lower rates, as the most likely source of USD rebound. That picture, delayed by several months now, is finally starting to develop. The clearest evidence was the rate cuts by the BOC and BOE, but the ECB (via Trichet) managed to throw a stiff-arm into the approaching tackler. Trichets hawkish press conference struck me as a rhetorical effort to embellish the ECBs credibility, but incoming data and revised outlooks continue to suggest that the ECB will remain on hold, before being compelled to lower rates in the middle of 2008. In particular, pay attention to revised outlooks from the IFO and IfW economic institutes in Germany on Thursday next week, with downward revisions likely to weigh on the EUR.


I have also been cautioning traders to be on the lookout for a shift by German officials on the strength of the Euro. In recent months, the Germans have been the main obstacle to Eurozone officials pressing the G7 to take a more convincing stand that the USD is too weak and the EUR too strong. We got that shift this week when German Fin. Min. Steinbrueck indicated that he would bring the issue up at the next G7 meeting in February. The other side of that coin is for US Treasury Sec. Paulson to make a more concerted effort to push the strong dollar policy, and there has also been movement on that front. Paulson has lately been talking more about the strong fundamentals of the US economy and the expectation that the USD would eventually reflect this strength, likely increasing his receptiveness to including language in the communiqu to suggest that the USD is not reflecting economic fundamentals. Together, these developments suggest that EUR/USD upside is limited over the next several weeks, and that strength should be sold.


Turning to the data coming out of the US next week, Monday sees only Oct. pending home sales. Tuesday sees Dec. IBD/TIPP economic optimism and Oct. wholesale inventories, followed by the FOMC rate announcement in the afternoon. Wednesday sees weekly mortgage applications, the Oct. trade deficit, and Nov. import price indexes. Thursday sees weekly jobless claims, Nov. PPI and Nov. advance retail sales, which will be the key report to watch. Friday finishes up with Nov. CPI, industrial production and capacity utilization.


Eurozone data on Monday sees German Oct. trade balance, French Oct industrial production, and the Dec. Sentix Investor Confidence gauge as the main reports. Tuesday sees German Nov. wholesale prices and the Dec. ZEW economic sentiment index for Germany and the Eurozone, another important forward-looking indicator. Wednesday sees 3Q Eurozone employment data and Oct. Eurozone industrial production. Thursday sees French and Italian Nov. CPI reports and 3Q Eurozone labor costs. Friday sees final Nov. German CPI and Nov. Eurozone CPI.


Japanese data begins on Monday morning with Oct. machine orders and bank lending data, followed in the afternoon by the Nov. Economy Watchers survey of small consumer firms. Tuesday afternoon sees Nov. consumer confidence. Wednesday morning sees Nov. corporate goods price index and the Oct. current account/trade balance. Thursday sees final Oct. industrial production in the afternoon. Fridays highlight will be the 4Q Tankan survey of corporate sentiment from the BOJ, with all the indexes expected to register declines, as private consumption slows and the global growth outlook deteriorates.


UK data on Monday sees Nov. PPI and Oct. DCLG house prices in the morning followed by Oct. leading economic indicator in the afternoon. Tuesday sees the Oct. trade balance. Wednesday sees Nov. employment data and Oct. average earnings report. Thursday sees the Nov. RICS house price balance and the Dec. CBI industrial trends survey.


In Switzerland, the SNB will announce its interest rate decision on Thursday and no change to the 2.75% mid-rate is expected.


Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Brian Dolan is an 18 year veteran of the currency market, having worked as a senior trader and analyst at some of the world's leading international banks, including Dai-Ichi Kangyo, Credit Suisse and American Express. He is the Chief Currency Strategist at FOREX.com

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  • JLG


  • Daisy


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I can feel the strain from Expats relying on a fixed income concerned by the continued strengthening of the peso and other foreign currencies,


I am not retired nor live full time in the Philippines, so its effect isn't as scary to me as those relying on a fixed income, and at the mercy of the exchange rate,


I firmly believe that dollar will in 2008 rear its mighty strength , you have several factors that will especially effect the Peso in general, let alone other currencies,


What I am getting at, this is mostly a speculation, market, and political driven itinerary, lets not forget 2008 is an election year in the USA, this is the foremost reason the dollar will climb a mountain once again, check election year history.


why is the peso at risk, hmmmmm lets first start with the unforgettable pardon of a inexcusable convicted thief, Erap. Arroyo might have save her arse behind her own political doors, but she has a big black eye in the world financial and political society. A dark day again in the history of the Philippines AGAIN, and to think I backed her for certain reasons, I always knew she was barely holding on to her presidency, but a move like this , I had no idea it was so grave.

sure the peso will hold through the holidays and see reprieve into 2008, the majority of the Filipino people are the most generous caring people I have known, this is why I really love the Philippines, The bsp isn't doing all it can knowing the outcome. The oil prices have more effect on the rest of the world than the USA


I also think we will see 140 in the euro before we ever see 155. The correction that was needed has been enforced , more ripple effect and people who cant see the call will still offer panic buys.


there is a lot of money being made right now, by people larger than me, so I am not among the privy.


but money can be made to make up Short fall if well thought out, I am testing the waters on a few. Right now you need to be making pesos!


Several things can blow everything apart, IE IRAN, lol next on our list. a lot of games are being played out. with every country we invade oil doubles, then retreats, we have just been invading alot, I am talking the UN here, not the USA, we just handle the lions share of the s***, I served in the first gulf, so I can talk. I still regret stopping short in the desert the first time, that's politicians again screwing up a good thing.


these are just my thoughts,


OUCH, I ate my shorts on that one! but was right about the part about making pesos, does that make me just a little wrong, LOL ???

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  • 1 month later...

well i was just surfing around and checked the exchange rate for the us dollar was 42.75php, i guess it went up a little bit

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Every little bit helps.

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Well Jim Rogers said before his world trip maybe 8yrs ago that the Euro would never last!!! He was wrong then,is he wrong again? Tonny

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