The Stare that Changed it All!!

Tuesday, September 22, 2009

So Monday seemed to be one of the most boring trading days of the year. With nothing that compelling to trade upon, investors followed the same old pattern of shoring up their positions in advance of a US Federal Reserve meeting – not that there was any reason for it, it seemed almost habitual.

The UN is meeting in New York for their big annual opening ceremony and the G20 will be meeting in the US on Thursday, the world is waiting for the outcome of these events and I personally think it is giving the investors a minor break.

As I foresaw yesterday, the equity markets are beginning to turn downward and the safe haven flows are trickling into the Yen and USD again, but it is not like it used to be. The Dollar is in trouble and everyone knows it, including the US President, Mr. B.H. Obama.

Sunday was a day like no other in US history - the US President went to four news studios to be interviewed on their notorious “Sunday Morning Talk Shows” – a US pastime in which hot political topics are securitized by a panel of so called professionals and occasionally an official from the administration is interviewed, but rarely if ever at all has a sitting US president participated. As well, Mr. Obama also hit the late night TV circuit, usually a lighthearted comedy style talk show, and again, a sitting US president has never done this before.

The topic of the conversation was primarily about his health care reform, an increasingly unpopular policy that is struggling for survival in the US. But the talk show hosts repeatedly went over to the state of the Dollar – and Mr. Obama repeatedly brushed off the questions as not being the most important thing facing the US at the moment. This worked until one moderator, George Stephanopoulos who used to work for President Bill Clinton, tied the concerns people have over health care reform to the state of the Dollar.

Pointing out that the 1 Trillion Dollars needed for the program will serve to only inflate the US currency. Forex traders should have seen the face of the President at this point - it was as if someone had taken the dessert off of his plate.

The face said it all, and his words after that meant nothing – although he denied that the two are interlinked and gave some half-baked answer using words and terms most people do not understand.

The fact remains though that this is the reality. The US Dollar is in trouble. The UN wants to change the reserve status. The Chinese want to change it as well. The Russians are playing the same game and the US does not seem to think there is an issue. Watch as the Dollar trends downward, and watch as the world becomes more vocal about US spending policy.

I said yesterday to keep clear of the Pound – and after watching the US President squirm, albeit only once, at a tough currency related question – I am leaning towards putting the UISD on that list too.

As a Forex trader I can tell you, there was more behind that look he gave, and I am not one who wants to wait it out and see what he is hiding, because it cannot be good.


About This Blog

Get the latest Forex online news and updates right here at one place.