SOROS SPEAKS

Whether it's Buffett or Rogers, Greenspan or Soros reporters are always keen to report the words of these market gurus. Last night it was the turn of Hungarian-born billionaire and founder of the Quantum Fund, George Soros, to speak at an Economist Magazine-sponsored event at which he warned that despite a return to positive growth, the U.S. economy was set to remain a drag.

The so-called Man Who Broke the Bank of England effectively helped bang another nail into the dollar's coffin with his words. The dollar has been losing momentum recently as investors have firmed in their view that the Federal Reserve won't raise rates anytime soon despite the apparent recovery.

Looking to the Far East Soros, who sold copious amounts of sterling in 1992 when the British pound was devalued when Britain was dumped out of the European exchange rate mechanism (ERM), said that China's unsustainable link to the dollar via its artificially pegged renminbi was a growing bubble. And we all know what happens to them!

On Thursday, the dollar failed to hold onto earlier gains as strong anecdotal manufacturing data showed ongoing growth within the New York state. Investors soon discounted the news and preferred to assume that the dollar would weaken regardless, which it did.

An unexpected drop in gasoline and distillate inventories resulted in a surge in energy prices with crude oil jumping to its highest price in exactly one year. November expiration crude rose $2.40 higher at $77.58. The surge in prices came hot on the heels of an Energy Information Agency report showing drawdowns in gasoline and distillate stockpiles when expectations were for a rise in each.

The price of heating oil futures jumped to its highest this year at $2.00 just as a nasty bout of weather hit the North East corner of the United States. Gasoline futures reached a six week peak.

But in a sober word of warning analysts noted that refinery utilization rates were down just as inventories were falling leaving at the least a question mark over just how bullish Thursday's news really might be for the fortunes of crude oil.

Nevertheless, just like the equity markets, the crude market is now higher on the year, like it or not.

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