Wednesday November 23, 2005 - 11:13:39 GMT
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Black Swan Capital - www.blackswantrading.com
A little $ surprise
“’Not to put to fine a point upon it’—a favourite apology for plain-speaking with Mr. Snagby.”
Charles Dickens, Bleak House
Surprise moves prices!
One-way dollar bulls got a bit of a surprise yesterday, emanating from a couple rogue economists who broke ranks within the hallowed halls of the Fed.
The dollar tanked on the release of the Fed minutes. Here’s how The Wall Street Journal described it: “Markets focused on a passage that said some policy makers ‘cautioned that risks of going too far with the tightening process could also eventually emerge.’”
Of course the market MAY have overacted as “officials believe continued rate increases ‘remained likely,’ and that they ‘remained concerned about heightened inflation pressures’ and worried that big increases in energy prices ‘would be transmitted to core consumer prices,’” The Journal added.
So there we have it from the intelligentsia we refer to as the FOMC. This esteemed body assembles occasionally in order to essentially control our lives. Yet once again, we peek though the keyhole into another meeting to learn the FOMC might as well flip a coin instead of arguing the virtues of the Taylor Rule.
ECB President Trichet could teach the Fed a thing or two about communication. On Monday, he simply said, maybe we will or maybe we won’t, but don’t expect just because we will raise rates in December, we will raise them after that. Thank you sir!
We are still as clueless as to the future course of the ECB. But at least Mr. Trichet has the guts to say he too is clueless. The Fed pretends it knows better. I guess that’s what happens when you stuff that many PhDs in one room.
Speaking of coin flipping…here’s a look at the results of our recent flip…
A nice little set up for a dollar correction we have been timidly expecting? Or are we once again seeing what we want to see from the charts? Hindsight, why have you left me on my own again!
Black Swan Capital
Note: We will not be publishing Currency Currents on Thursday and Friday. Making merry we will be instead—I hope, celebrating Thanksgiving. We wish a Happy Thanksgiving to all those who plan the same. Take care.
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