Two Ways To Play: Dark Days for the Dollar
Strengthen your portfolio in good times and bad.
Dollar-Yen in Trouble
The dollar may complete its biggest annual decline against the yen in over 2 decades - a sign the US recession is not abating. According to Bloomberg, the dollar traded around 90.24 yen this morning in London from 90.34 yen yesterday in New York. It's fallen 19% this year, which is its biggest drop since 1987.
Lee Hardman, a currency strategist for Bank of Tokyo-Mitsubishi, says, "The risks are still heavily weighted to the downside for the dollar-yen." He expects the greenback to weaken to 80 yen during the first half of 2009.
See Professor Mark Bloudek's comments in Globalization? What Globalization?
From the Bull Pen: Gold prices will likely move higher on continued weakness in the greenback. Bulls can play the ETF (GLD) with a sell stop near $82-$83.
From the Bear Cave: Nintendo (NTDOY) has been very successful with its Wii console, but can the stock weather the macro storm? The $50 mark is proving to be significant resistance, and bears wishing to play the downside can set buy stops above that level.
Quick Check Around the World
Asian trading closed with the Hang Seng 1.07%, Sensex -0.71%, Taiwan 0.05% and Shanghai -0.66%.
Glancing towards Europe, we see the CAC 1.22% and FTSE 1.08%.
As of 8:15 a.m. EST, S&P futures are trading +1 to 890.64, and Nasdaq futures are -0.25 to 1201.
A Look At Commodities
Crude oil is trading -1.63 to 37.40. Gold is -8.5 to 861.50. Silver is -0.15 to 10.830, and copper is +1.150 to 133.20.
The dollar index is +0.520 to 82.300.
On the Radar
07:00 Initial Jobless Claims
08:30 NAPM- Milwaukee
Click here for the full trading radar.
Good luck today and have a Happy New Year!
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