Two Ways: Dollar Caught Between Euro and a Hard Place
Strengthen your portfolio in good times and bad.
In a story by Reuters, G8 sources said China made the request during preparatory talks on a joint statement that would be issued on the second day of the summit. That July 9 meeting would include the G8 countries (Canada, France, Germany, Italy, Japan, Russia, the UK, and the US), as well as the G5 nations (Brazil, India, China, Mexico, and South Africa).
Specific mention in the communiqué remains open, and officials will further discuss preparatory talks on Friday. But at the heart of the debate is China and other emerging countries, who are seeking an alternative currency, in order to lessen their exposures to the US dollar. This reflects a shifting balance of power in the world economy.
China holds more US Treasury debt than any other country, and has expressed concerns regarding the US's spending and stimulus programs. Its last proposal to use SDRs failed to gain ground when other world leaders continued to back the dollar as the global reserve currency.
The euro leapt to around 1.4202 per US dollar, but gradually faded to 1.4146 by the close of the US equity markets.
From the Bull Pen: Precious metals continued to gain ground today, and bulls can look to the Silver ETF (SLV). Sell stops can be set below today's lows ($13.30).
From the Bear Cave: It seemed as if China showed a sense of urgency regarding its concerns with the dollar, and the markets responded in a big way. The intermediate trendline for the dollar continues to point down. Bears can play the dollar bearish fund (UDN). Sell stops can be set below $26.70.
One more day, Minyans, until the holiday weekend. Send pics of your best BBQ creations to firstname.lastname@example.org.
Have a good night!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter