adridado
02-16-2005, 04:29 AM
The dollar has stayed on the defensive for much of the previous 24 hours and shrunk into a low close 1.3050. The buck was since the US has been reported to have removed its ambassador unsettled by developments. There was likewise a paring of long dollar positions ahead of Greenspan's testimony, however the dollar dipped back into 1.3020 in ancient Europe on Wednesday.
The US Treasury funding inflows report overshadowed the expansion signs. The headline inflows dropped to US$61.3bn for December from US$89.3bn the past month, but that was over the trade deficit. There was a decrease in capital inflows, but an increase in bond inflows offset that. There'll be some concern the purchase of US assets by US residents stayed strong at US$21.6bn, however, the statistics for the first quarter of the year will probably be more significant in this context since the dollar was firmer. Further outflows would indie a flow of funds from the US and could endanger the medium-term outlook of the dollar.
Fed Chairman Greenspan's congressional testimony will be vital for the buck. If Greenspan hints at rate of interest rate rises, the dollar must secure support that is substantial. Remarks within budget deficits and the current account would provide help. Conversely, confidence would be eroded by Greenspan concerns within the shortages when he indies there is from US tightening a pause shut, and the buck will weaken. Greenspan keeps a perspective that is balanced, but the stance of his opinions will be significant. The industry reaction are also significant in deciding whether the current weakness of the dollar is the beginning of a recession or a correction in the January profits. The forces on the buck still ought to be close to equilibrium together with all the dollar resisting a reduction that is near-term that is sharp.
Analysis provided by http://www.investica.co.uk
The US Treasury funding inflows report overshadowed the expansion signs. The headline inflows dropped to US$61.3bn for December from US$89.3bn the past month, but that was over the trade deficit. There was a decrease in capital inflows, but an increase in bond inflows offset that. There'll be some concern the purchase of US assets by US residents stayed strong at US$21.6bn, however, the statistics for the first quarter of the year will probably be more significant in this context since the dollar was firmer. Further outflows would indie a flow of funds from the US and could endanger the medium-term outlook of the dollar.
Fed Chairman Greenspan's congressional testimony will be vital for the buck. If Greenspan hints at rate of interest rate rises, the dollar must secure support that is substantial. Remarks within budget deficits and the current account would provide help. Conversely, confidence would be eroded by Greenspan concerns within the shortages when he indies there is from US tightening a pause shut, and the buck will weaken. Greenspan keeps a perspective that is balanced, but the stance of his opinions will be significant. The industry reaction are also significant in deciding whether the current weakness of the dollar is the beginning of a recession or a correction in the January profits. The forces on the buck still ought to be close to equilibrium together with all the dollar resisting a reduction that is near-term that is sharp.
Analysis provided by http://www.investica.co.uk