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Dollar Intervention Risk 'Meaningful'

Sunday, September 28, 2008, 9:17 PM

Having watched the currency markets for long enough to know, I am certain that they are among the most regularly interfered-with of them all.  

In this article it is openly speculated that perhaps a joint support of the dollar is in the works:

Quote:
Sept. 29 (Bloomberg) -- A growing number of currency traders and strategists are starting to speculate that finance ministers from the world's biggest economies will join to support the dollar.

"We're getting closer to the right conditions for authorities to step in and prop up the dollar,'' said Maxime Tessier, who manages $151 billion as head of foreign exchange in Montreal at Caisse de Depot et Placement. "The nightmare scenario will be a wholesale loss of confidence in the dollar.''

"The central banks of the world have embarked on all sorts of extraordinary interventions,'' said Stephen Jen, the global head of currency research at Morgan Stanley in London. "Currency joint intervention would be the least surprising. And it would probably be the cheapest.''

Link (Bloomberg)

I find it remarkable that they did not find a single quote from somebody who thought that the 9% gain in the dollar against the Euro was already a clear sign of manipulation.

To me it is utterly improbable that the dollar rose, even as the US lost all but two of its investment banks, bailed out its largest insurance company, and suffered the largest bank failure in history. To explain this, I have to assume that whomever was buying the dollar and selling the Yen and the Euro was doing so for reasons that were not economic in nature.

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3 Comments

bearing01's picture
bearing01
Status: Silver Member (Offline)
Joined: Sep 7 2008
Posts: 153
  Don't forget this one:

 

Don't forget this one: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=an9oBswaHbmE


Quote:

 

China May Slow Pace of Currency's Gains, Hale Says (Update1)

By Zhang Dingmin and Zhao Yidi

Sept. 28 (Bloomberg) -- China's central bank has indicated that it may slow the pace at which the Chinese currency is gaining against the U.S. dollar, according to David Hale, chairman of Hale Advisors.

``I had lunch with the People's Bank of China on Friday, where they told me they are going to slow down the appreciation of the currency here,'' Hale told a plenary session today at the World Economic Forum in eastern China's Tianjin city, without disclosing the identity of the official he spoke with.

cmartenson's picture
cmartenson
Status: Diamond Member (Online)
Joined: Jun 7 2007
Posts: 5570
It's a full court press to talk up the dollar

I'm wondering if they're trying a bit too hard here...

``The dollar is set up for a relief rally,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``The U.S. rescue package is on its way to becoming law. That goes a long way to help improve sentiment for the U.S. financial sector and the dollar.''

``This news means financial-market turmoil is also appearing in Europe,'' said Toshihiko Sakai, head of trading in foreign exchange and financial products at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. ``European currencies may weaken.''

``The euro's bias is to go lower,'' said Masahiro Sato, joint general manager of the treasury division in Tokyo at Mizuho Trust & Banking Co., a unit of Japan's second-largest publicly listed lender. ``Funding problems for the European financial sector mean the European Central Bank may have to lower interest rates sooner rather than later.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=a57FFNxSEHYY&refer=home

Suddenly all of Japan is aligned in their view that the dollar needs to go high and the Euro lower. 

Hmmmmmm....after watching the astonishing inverse correlation between Dow market behavior and the Yen I have to wonder what's really being said here.

 

 

machinehead's picture
machinehead
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Where is the stock market's 'relief rally'?

Is the dollar's 'relief rally' gonna be like the stock market's 'relief rally' -- the one whose duration we were all speculating about yesterday?

In the cold light of dawn, I see the spoos down 20 points. It's as if Ms. Market is dismissing the KongressKlowns, saying "Come back when you have some REAL MONEY, you fuzzy-cheeked weenies!"

Which brings up a point -- where are dollar's 'circuit breakers'? SurprisedSurprisedSurprised

Money mouth "PSYCHO BEARISH" Money mouth

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