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Market Turbulence Reigns
By Grace Cheng on November 19, 2007 | More Posts By Grace Cheng | Author's Website
USD/CHF descended to a few pips above the expected bear target around 1.1150 today (”1.1140-50″) . 1.1130-40 should provide relatively strong support at the moment as many traders will want to take their short profits around that zone. A successful break below this area is likely to pull Swissy down to 1.1100, 1.1070-80. EUR/USD continues to trade in a tight range straddling 1.4600-1.4700, a short distance away from its all-time high around 1.4750 reached last week.
Many businesses are already complaining about the high EUR/USD exchange rate, ranging from small businesses to mega oil tycoons. The Gulf countries in the Middle-East aren’t happy at all about the ever-declining USD as they rake in oil money in US dollars. Not only are they making “less”, they are also pressured by the increasing rate of inflation in the region. Inflation in the UAE rose to a record 9.3% last year, and Qatar has the highest inflation in the region, reaching 14.8% in the first quarter.
There is now a lot of talk that either the UAE or Qatar may end their fixed forex rates to the USD, even though they say they don’t have such plans for the moment. Even investment guru Jim Rogers is saying that “the dollar peg is doomed”. If that happens, USD will suffer even more. And not only that, there will be great repercussions for everyone who’s not a powerful oil producer.
Gulf states will be discussing a proposal to revalue their currencies at a summit in Doha, Qatar, on December 3-4.
Tuesday:
UK mortgage approvals 0930 GMT
Canada CPI 1200 GMT
US housing starts 1330 GMT
US FOMC minutes of Oct 31 meeting 1900 GMT
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Nice article it’s good to hear jims view on the pound for once as he ussually talks about the dollar.
[...] said that over the long term, the US dollar is doomed. What are your thoughts on the British [...]
[...] said that over the long term, the US dollar is doomed. What are your thoughts on the British [...]