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FYI...
JW
-----Original Message-----
From: James Smith [mailto:JSmith@xxxxxxxxxxxxxxxxx]
Sent: Monday, February 07, 2000 5:08 PM
With the US trade deficit for 1999 likely to set a Record of $270 Billion, and
the US trade deficit with Japan likely to continue to widen, why should the
dollar start what appears to be a fast move to JY 112.80-116.15?? Many
analysts ascribe today's move to a number of key factors: 1) Greenspan is
likely to continue to raise rates, while Japan probably won't, and 2) the US
economy continues to show more strength than the Japanese economy, as the
Japanese economy may actually be weakening here without further govt stimulus,
3) MOF may be forced to supply more yen to the system (ie "print money") in
view of the weak domestic economy, 4) Reform action may be stalling which may
also hurt the Japanese economy. But could there also be another reason???
Could it be that S&P Credit Rating Agency is about to downgrade Japanese Govt.
bonds to Junk bond status?...alright I exaggerate...but only a little. Moody's
have already downgraded Japanese debt & I can't see why S&P won't also downgrade
their debt. Today DLR/YEN is indicated for a Turning Point and a Directional
Change. The DLR is also just today breaking thru weekly trendline
resistance,which also supports a fast move higher for the dollar. The Japanese
Post office recently took in new business of 1.1 Trillion Yen...and investors
are now getting 0.28% on their 10year committment. Did I read this wrong? How
many more Japanese people will open new 10yr committments with a Post Office
that is technically insolvent in a currency that is headed for Y278 by 2003?
Could this fast move for the dollar be the result of Smart Money starting the
exodus out of Yen before the fit hits the shan?? If US stocks slide, any USD
weakness will be temporary. Furthermore, any dollar weakness should be viewed
as a buying opportunity for longterm dollar positions.
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