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| Daily Jurojin - Friday, May 22, 2009 |
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Friday, May 22, 2009 Dollar plunge offset by Fed's fearsThe dollar took a pasting mid-week reaching its lowest point so far in 2009. There was little to actually drive the unit lower at the time other then a positive yet creeping sentiment in favor of recovery prospects as investors appeared to warm to equities.For any dollar bulls out there Wednesday must have been extremely frustrating. Instead of waiting for the very latest nuggets from the Fed on how it sees the economy unfolding, traders refused to wait for the doors to open - they just barged right through the doors bowling over the thin line of defense and raided the shelves. But then, the minutes from the Fed's latest policy meeting revealed a deeper sense of worry than investors had expected to hear. That turned the dollar around and sent stocks down on the day. That latest development is another sign that no matter how optimistic equity bulls want to be, the all-telling closing print in the red on the S&P 500 speaks volumes - at least technically. The FOMC statement revealed that the Fed was more concerned about an era of ultra-low price patterns, which would not foster the appropriate conditions for the economy. Yet the market had convinced itself that given the drop in the pace of contraction that deflation was an unlikely event and that perhaps soon interest rates must back up. Well, at Jurojin Weekly, we've been working diligently to keep our loyal readers ahead of the game. We can't pretend we agree with all we see and we can't state without fingers crossed that we predicted all of these events, but what we can state hand on heart is that we considered all of the relevant facts and we discounted them and then took a look at the appropriate charts before recommending a trade. Here's a prime example from Monday night when we penned our latest forecasts. "It seems hard for investors to drum up enthusiasm for any single currency these days as most have their own variety of spots. Currency traders can breathe easier these days as the global economy displays signs of improvement from the first quarter. And as they do so they are selling dollars feeling a lesser need to cling onto the dollar as a life raft. Instead they're buying currencies that offer the prospect of a better return should the economy rebound." The Supreme Council of the Secret Order of Jurojin |
