Monday January 30, 2006 - 11:37:12 GMT
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Black Swan Capital - www.blackswantrading.com
Good $ price action to the news...
â€śThe facts are unimportant! Itâ€™s what they are perceived to be that determines the course of events.â€ť
R. Earl Hadady
A lot can be said, but bottom line one has to say the buck has displayed good price action relative to the news.
â€˘ Revised US GDP on Friday in the tankâ€¦1% vs. 4% range expected
â€˘ Strong Germany consumer confidence data
â€˘ Strong Japanese industrial production data
â€¦and the US dollar moves higher. Many prognosticators are predicting the dollar bear is back. Yet, the correction of the dollar from its December 31, 2004 low to its high in mid-November 2005 (using the US $ Index as a measure) is well within the normal range (38.5%) as you can see in the daily chart of the US$ Index below:
Itâ€™s quiet, as many jockey into position ahead of the Fed rate announcement tomorrow. This morning we do get a peak at US personal income and spending for Dec. A surprise could lead to some anxiety one way or the other.
The question: Is the Fed done this time? Or will they stay on the table signaled by an expression of heightened inflation concerns now that energy is back near $70 and industrial materials prices climbing higher and higher?
But even if we can answer those questions, it doesnâ€™t mean we know where the dollar goes. All those players jumping on the euro last Friday immediately after the â€śdismalâ€ť revised US GDP report know that for sure.
Black Swan Capital
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