Update 2: US Dollar hits 15 month low..

Update 2: US Dollar hits a 15 month low, this as Geithner said in Tokyo today that we fully support a strong US Dollar. I wonder if he got more laughter? He has been ham handed on Dollar policy since March.

The dollar dropped to a new 15-month low as the the euro rose above $1.50 Wednesday morning, even as Treasury Secretary Timothy Geithner reiterated the administration’s stance that a strong dollar is good for the U.S. economy.Geithner, in a speech in Tokyo on his way to a summit of Asian finance ministers in Singapore, also said low interest rates and other government supports for the economy were still needed.

The expectation that the Federal Reserve will keep the key U.S. interest rate near zero has been weighing on the dollar. Higher interest rates make a currency more attractive for investors, since bets made in that currency can earn higher returns.

Against a basket of six major currencies, the dollar hit a 15-month low of 74.775.

“The momentum and the conviction that the Fed will not raise rates any time soon, coupled with the fact that the major central banks continue to provide liquidity liberally” means the “fundamental force” weighing on the dollar will persist, said Brown Brothers Harriman analyst Marc Chandler in a research note Wednesday….

China is making noises about letting the Yuan rise. This would be helpful to all the other economies whose exports are suffering as we let our dollar fall, they are trapped while the Yuan is pegged. Let’s see what shakes out. IMO it is a bad sign for the doollar. This would have been GREAT 5 years ago. Now it is a commentary on the weakness of our currency.

China sent its clearest signal yet that it was ready to allow yuan appreciation after an 18-month hiatus, saying on Wednesday it would consider major currencies, not just the dollar, in guiding the exchange rate.

In its third-quarter monetary policy report, the People’s Bank of China departed from well-worn language on keeping the yuan “basically stable at a reasonable and balanced level.” It hinted instead at a shift from an effective dollar peg that has been in place since the middle of last year

(more…)

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November 9, 2009. Tags: , , , , , , , , , , , . Economy, Finance, Obama Administration, Politics, Taxes, Wall St. 1 comment.

Is Rahm Emanuel running US Dollar policy? From Jan-July Geithner met/spoke to Rahm at least 108 times…

Kudlow is all over it. The Administration is making meaningless noises about supporting a strong dollar while they let it fall. Asia is trying to hold it up. Hyperinflation coming baby…

Vodpod videos no longer available.

Airtime:  Fri. Oct. 9 2009 | 4:15 PM ET

Discussing who is behind monetary policy, with Steve Moore (sp), WSJ and CNBC’s Larry Kudlow.

October 9, 2009. Tags: , , , , , , , , , , , , , . Cabinet, Economy, Finance, Obama Administration, Politics, Taxes, Unemployment Statistics, Wall St. Comments off.

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