You just knew something had to give with the US dollar as the week went on. Reeling on the ropes, with every pundit predicting the dollar's demise including suspicous Euro oil dollar stories denied by many,somewhere another magical FED rabbit will be pulled out of it's arse.
All the market needed to hear was the remote possibility of an interest rate hike will happen when the time is ripe and respond they did. The US dollar popped,bonds were driven lower,the ten year note $TNX index leaped a point and some in the knee jerk fashion. Even RBC raised mortgage rates which rattled a few in Canada I am sure where housing is being bought and sold like BRE-X and Nortel shares at their all time highs.
Gold got hit $10 or so but recovered to only down $6 so the COMEX players aren't buying it quite yet the dollar will spike. Gold is acting very strongly here and if inflation is coming, the shiny stuff will be there to act as a hedge. Next week will be very important for gold. Any more interest rate hike talk may take an edge off as the shorts are maxed and a few stop loss hits and down gold could go but not for long in my opinion.
Bernake indicated no hikes til the economy improves but just the impression it will be happening may give those in control of the Forex markets a reason to hold the fort and play any short term squeeze on the dollar shorts as it is very oversold.
I hope to have some more stock updates this week. My SPW.P announced their oil deal is not happening but will announce another deal shortly so stay tuned, I think things are beginning to heat up with all the Closing Bell's picks.
No comments:
Post a Comment