The U.S. dollar is becoming more and more attractive. With QE3
being shelved
Over the past few months the U.S. dollar traded primarily on
risk appetite. I believe they would sell the dollar and by risker assest. So as
the S&P 500 or the dow rose the dolla would sell off. However, i believe
something has fundamentally changed. The us dollar has started to take notice
of the improvements in the us economy by rising on good data and sliding on
weakness. Today the reaction and Optimism from the FOMC sent the dollar
soaring, against all major currency. Now tell me if I’m wrong in thinking
whether or not we are seeing a fundamental shift in how the dollar is trading
Japan
Shirakawa said “The task of overcoming deflation and
achieving sustainable economic growth with price stability cannot be realized
overnight. The issue of beating deflation is strongly related to how growth
potential should be strengthened and patient effort is needed to tackle this
problem. The BOJ will continue to do the best we can as a central bank. At the
same time, I strongly expect that parties concerned such as companies,
financial institutions and the government will do their utmost while fully
recognizing the importance of strengthening growth potential. In managing
policy, we must ensure that the economy is headed toward a path of sustainable
growth and price stability. Given that the cause of deflation is structural
problems such as Japan's low growth potential, we cannot expect to achieve our
goal immediately." So has the Jap tactics changed also is forcing on
growth and will this allow for a weaker yen? Instead of relying on intervention
which has proven woefully ineffective in weakening the yen, the Japanese
monetary authorities are looking at QE as a much viable policy tool to control
any appreciation of the currency.” And if this is the case then the yen will
weaken as proved with other countries that has introduced this method so in
effect The central bank’s plans for
continued easy monetary policy has made the Yen less attractive especially on a
day when the FOMC statement suggests that more QE in U.S. is no longer
necessary.
Pls tell me what you think
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