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Dollar Acting Schizoid Ahead of G20
The “normal” correlations of currency pairs was anything but – as the Euro surged from the 1.2500 range to over 1.2850, while the Pound Sterling lost ground most of the day closing relatively unchanged at around 1.4800. Meanwhile the Carry Trade continues it’s gyrations as the dollar gained ground against the Yen while losing against the Aussie. The Canadian Loonie also lost it’s marbles dropping from 1.2400 to 1.2100, All this within a traders dayze.
Review of the Charts - 3 Days Later
(Above) Aussie Maintains Consolidation but Tests Support (click on Charts to Enlarge)
(Above) Dollar - Swiss pair continues upward trend while creating a new lower support line
Above- Euro makes almost a double bottomand stays within Trend Channel - (click to Enlarge)
Above - Pound Rides the Lower Trend Channel - Testing Below (click to Enlarge)
President Bush Addresses Manhattan Institute
The currencies seemed to get reactive around the same time as President Bush addressed the Manhattan Institute mid day. His speech seemed to be a reminder of why the Free Market system must survive despite the changes that must be made to move into the interconnected global markets. Bush may have been alluding to the Bretton Woods agreement when he stated that decisions and changes must be made that, “Better reflect the 21st century not those based in the 1940’s” – which leads me to discuss the….
Historic G20 Meeting starts in Washington
UK Prime Minister Harold Brown has been quoted as saying that decisions over the next few months will reshape our world for the next few decades or more. President elect Obama is sending former secretary of state Albright to monitor the discussions. In my opinion he is missing an opportunity to understand the players and issues – yet his appearance may have been a distraction - so It’s a toss up.
Tensions may run high, and with 20 nations sovereignty on the line - the odds are that this meeting will be a meeting to hold more meetings. UN-less some agreement has already been drafted behind the scenes –
The news on Thursday morning was bleak
New Weekly Jobless Claims were far worse than expected with 516,000 new additions to the unemployment rolls and the US Trade Numbers showed a large drop in exports. But that did not stop the market from surging ahead.
The Good News
The MBA Mortgage Purchase Applications rose 9% and Refinancing applications were up 16% as lower interest rates are filtering down to the buyers that need to sop up the liquidity of the flooded housing market.
Friday Brings Retail Sales and Consumer Sentiment
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