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Oil Drops Despite Storm in the Gulf - Coincidence?
The Dollar made a huge rally against all the majors. Today’s drop in Oil, despite a storm in the Gulf is proof to me that a strong US Dollar will bring down oil, gasoline, and hence inflation comes down.
Current Policy “Too Accommodative”
Voting member of the FOMC - Philly Fed President Plosser stated that, “I anticipate the reversal will need to be started sooner rather than later” when he was discussing the fact that current policy was “too accommodative”. The fact that the low rates between the banks are no where to be seen by consumers should be an issue.
The Currencies
As of midday Tuesday
The Euro tanked over 180 pips dropping form 1.5940 to 1.5760.
The Pound gave up over 150 pips sinking from 2.0075 to 1.9900.
Hmm.. It would be nice to see those prices go down, but it will not happen in a day… 200 points move…don’t you think it is more emotional move, rather that pure technical and rational?
In response: All the majors moved in tandem yesterday - It may very well be an “emotional” move as you say, but all trading is a reflection of our psychology. At this time the Euro has made a double top. The threat of breaking into new highs is now diminished.