Posted by WARREN MOSLER on January 24th, 2011
With crude/wti below 90 and looking soft, for anyone who wants to know my opinion, I’m now inclined to favor the $ over the euro.
This entry was posted on Monday, January 24th, 2011 at 9:40 am and is filed under Comodities.
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You favor $ over the euro and you favor euro over the yen. So the trade is long usd/jpy?
WARREN MOSLER Reply:January 24th, 2011 at 3:42 pm
that would be my humble opinion on how I currently read the ‘fundamentals’
and my mind can change quickly as circumstances change. particularly the price of crude.
and brent nearly $10 over wti definitely clouds the picture
Curious Reply:January 24th, 2011 at 4:57 pm
US imports about 12M barrels/day, so let’s say $10 price drop translates into $120M reduction in supply of dollars abroad.
In your opinion, what kind of impact can it have on the eur/usd (i have read somewhere that eur/usd volume is around $800 bilion daily)?
WARREN MOSLER Reply:January 24th, 2011 at 9:45 pm
that would be an annual swing of 50 billion which isn’t nothing, and what percent of daily volume it is isn’t the issue. two entirely different things
Yet all these “emerging fundamentals” are entirely dependent upon weak-kneed, low intellect politics. For the time being, politics is the best predictor of changing Fx markets?
Are there any election-derivative betting pools? Any policy-default-swaps in Vegas?
Would one campaign-finance-reform butterfly flapping even one wing cause a Tsunami in all mkts?
Find out where the butterflies breed & do whatever you can to preserve their nesting grounds. They’re under threat by you know whom.
Tom Hickey Reply:January 24th, 2011 at 7:42 pm
A lot hangs on the cb’s and monetary authorities since the GFC began. Look what happened to the euro, first, when it looked like the periphery was going down, and then when the authorities stepped in. Hard to gauge “fundamentals” in this environment. A lot of people got burned looking at markets as markets and not realizing the power of governments and their willingness to wield that power in extremis.
what is brent and wti?
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