[wu_trax]

Seriously, what are you or that guy who wrote that article talking about? Have you looked at a chart recently? The euro gained ten us-cent in a little more than a month. It hit record highs every day for a whole week, no profit taking, no other setbacks, no nothing. Of course it can't go on like that forever, eventually people start realizing their profits.

But that doesn't change the fundamental data, that still clearly indicates a further deterioration of the dollar, not only against the euro, but also against every other currency around. The USA needs to attract $1.8 billion a day in foreign investments. That is just to keep the rates steady, not to talk about a return to the old strength of the Dollar. This takes up 3/4 of all the savings of all the people on this planet every year, how long do you expect this to work?

This never was much of a euro strength, but a dollar weakness. The Euro just happens to be the only real alternative to the dollar, thats why there's so much babbling about it and why it rose a little more than most other currencies.

And don't even attempt to bring Bush into this. Besides talking and maybe putting some pressure on China to revalue the Yuan there really isn't much he can do about the exchange rates. (And he did say it a month ago, a year ago, all the time since the dollar started falling, it just doesn't change anything.)

Only the big central banks could stop the fall of the dollar for a while by a joined intervention in the currency market, but even that would only slow things down, not reverse the trend. The dollar needs to continue to fall until the current account deficit is either closed or at least is down to a sustainable level.

[nicollo]

The USA needs to attract $1.8 billion a day in foreign investments.

The U.S. doesn't "need" to attract foreign investments. The exchange rates cover what the money flows mean. It's not some big scheme to excuse the account deficit. That the euro can't kick in the dollar's door means that euro markets are not attracting any more money than what the dollar gives 'em the daily shrug of the currency markets.

Then ask yourself, as the author of the piece does, why US investors are buying overseas when it is more expensive for them to do it with the lower dollar? The author says it's investment money "chasing the currency rally through capital markets." I don't buy that explanation, other than as it means that investors always seek value. But in this case, they're chasing value despite the obstacles of the dollar exchange. Once again, things aren't nearly so bad as folks would have it.

Where you see an absence of euro strength in the face of "dollar weakness," I don't see dollar weakness at all. The dollar is calling the shots here, not the euro, or any other currency. Just becuase the dollar is down doesn't mean it is weak. It is finding its place according to its inherent numbers. The way the press and the doomsayers are screaming the dollar ought to be on its ass. It's not. You say it's got further to fall. I doubt it, and from the pronouncements of yesterday, I'm damned sure the President thinks it ain't falling anymore, either.

You didn't understand what the President did. He wasn't trying to influence the markets -- he can't, and he knows it. He's speaking about it now since he thinks it will strengthen. That way it will look like he influenced it, whereas you and I know both he can only talk on this one.

Btw, all those late 1990s foriegn money inflows? Guess where all that cash went? Uh, let's see, let's start with pets.com... The money came in, and it never went back home.