Thursday March 13, 2008 - 12:00:47 GMT
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Black Swan Capital - www.blackswantrading.com
No End in Sight
FX Trading â€“ No End in Sight
It should be anything but a quiet Thursday. You can almost count on the buck falling another 1% today. But whatâ€™s going to be the catalyst this time? Or shall I say, whatâ€™s going to add to the catalysts already pushing the dollar to depths where no dollar has gone before?
The economic calendar for the U.S. could certainly spice up trading today. The weekly jobless claims number seems to be growing in importance. Any better-than-expected improvement probably wonâ€™t impact markets much, but a worse-than-expected figure always has the potential to add to the pain and stir up concern.
Retail sales, a gauge of consumer health, may also make things interesting this morning. The big concern is that filling up the SUV at the local gas station could seriously dampen spending in other areas. Fewer jobs arenâ€™t helping the situation either. As you might imagine, the potential for disappointment remains likely; as do recessionary expectations.
Even with the Federal Reserveâ€™s recent adjustments to their auction facilities, the credit crisis may not subside anytime soon. All banks not Central seem to be tightening lending standards simply because theyâ€™re worried about the availability of capital due to growing losses from their exposure to this whole mess.
The matter is becoming so uncontrolled that Treasury Secretary Henry Paulson is heading-up a new plan, of grander proportions, in hopes of stemming the crisis. Check out the link I included in the Key News section of todayâ€™s issue for some more details.
Itâ€™s obvious that the Fed and government officials are trying to aid credit markets and the economy, but they havenâ€™t yet succeeded. Should they finally prevail, and restore order, what can we expect from the dollar? After all, restoring order would just take us back to a point when money was available and risk-taking was fashionable. Even then traders did everything they could to avoid the dollar.
The dollarâ€™s precipitous decline grows scarier by the day. And the worst part is rarely do we ever hear that the dollar described as oversold, undervalued, or due for a correction. Unfortunately, nothing seems set to change that. It becomes a game of wait-and-see; wait and see how long until the U.S. economy and the Federal Reserve alter their course.
John Ross Crooks III
Black Swan Capital
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