Foreign Exchange - Currency Outlook
We will continue to get important data today and this week, including the TICS capital flow report, industrial production (probably a drop of 0.9% for the 14th month), CPI (probably a minor rise of 0.1% after 0.4% in Feb), and the Empire State manufacturing survey (probably a contraction to –35 from –38.2). But we think the battle between the banks and the government is the key event.
Tomorrow we get the JP Morgan earnings report, and on Friday, Citigroup earnings report and GE Capital. Next week it’s Bank of America, American Express, Ford Motor, Credit Suisse and Morgan Stanley.
We should assume that all of these try to put lipstick on the pig.
Then it becomes a test of analysts' ability, and the government's ability, to spot the cooked numbers. This is absolutely critical for the long-term health of the economy. Banks and industrial companies cannot be allowed to lie anymore in their financial reports.
The whole world believes US accounting reporting is corrupt, rigged, dishonest - pick a word.
And they are right.
The financial sector became powerful during the last two decades, accounting for 40% of total corporate profits and populating Washington with lobbyists and lawmakers beholden to them. A financial elite was formed that has hardly been tamed by the humiliation of a few, and government has been in thrall to the money-men, exactly the conditions that brought about reform in the 1930's. This time, the financial elite is resisting restructuring with amazing muscularity, mostly by scaring people into believing they are too big to fail and the status quo must be maintained. Alas, we are more like Japan than we thought in this respect. In Japan, the banks were and are cross-shareholders with industrial companies, hence too big to fail. In the US, the fear of financial market chaos vies with loathing of using public money to bail out the very elite that caused it. This is more than an economic or financial issue - it’s a social and political one.
Obama is walking a tightrope, indeed.
We think its time to buy us dollars as it is in an uptrend against the euro exchange rate and never mind that the reasons are unclear. The commodity currencies are also strong ,which if we believe conventional intermarket analysis, should be a US dollar exchange rate negative. But overriding it all is a renewed sense that this is indeed a global recession and it's foolish to think otherwise.
In that case, the US dollar is the safe haven.
Pounds to US Dollars = 1.5000
Pounds to Euros = 1.1370
Euro to Pounds = 0.8789
Pounds to Australian Dollars = 2.0777
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
We will continue to get important data today and this week, including the TICS capital flow report, industrial production (probably a drop of 0.9% for the 14th month), CPI (probably a minor rise of 0.1% after 0.4% in Feb), and the Empire State manufacturing survey (probably a contraction to –35 from –38.2). But we think the battle between the banks and the government is the key event.
Tomorrow we get the JP Morgan earnings report, and on Friday, Citigroup earnings report and GE Capital. Next week it’s Bank of America, American Express, Ford Motor, Credit Suisse and Morgan Stanley.
We should assume that all of these try to put lipstick on the pig.
Then it becomes a test of analysts' ability, and the government's ability, to spot the cooked numbers. This is absolutely critical for the long-term health of the economy. Banks and industrial companies cannot be allowed to lie anymore in their financial reports.
The whole world believes US accounting reporting is corrupt, rigged, dishonest - pick a word.
And they are right.
The financial sector became powerful during the last two decades, accounting for 40% of total corporate profits and populating Washington with lobbyists and lawmakers beholden to them. A financial elite was formed that has hardly been tamed by the humiliation of a few, and government has been in thrall to the money-men, exactly the conditions that brought about reform in the 1930's. This time, the financial elite is resisting restructuring with amazing muscularity, mostly by scaring people into believing they are too big to fail and the status quo must be maintained. Alas, we are more like Japan than we thought in this respect. In Japan, the banks were and are cross-shareholders with industrial companies, hence too big to fail. In the US, the fear of financial market chaos vies with loathing of using public money to bail out the very elite that caused it. This is more than an economic or financial issue - it’s a social and political one.
Obama is walking a tightrope, indeed.
We think its time to buy us dollars as it is in an uptrend against the euro exchange rate and never mind that the reasons are unclear. The commodity currencies are also strong ,which if we believe conventional intermarket analysis, should be a US dollar exchange rate negative. But overriding it all is a renewed sense that this is indeed a global recession and it's foolish to think otherwise.
In that case, the US dollar is the safe haven.
Pounds to US Dollars = 1.5000
Pounds to Euros = 1.1370
Euro to Pounds = 0.8789
Pounds to Australian Dollars = 2.0777
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
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