Weak Dollar?

[forexcranium]

To add something more to the table...last friday, the dollar reached an all time seven-week high against the yen. But, for all you yen traders out there, a warning, I wouldn't bet on the yen too heavily...Japan's economic recovery is on track.

[pangor]

I am struggling to understand all of this - Is it in Japans interests to keep the dollar high ?

couldn't elaborate on your last post a bit for me could you ?

peter

( now reading "economics for dummies" )

[bazoonga]

The strenght is relative.
At this point it is Jpan's interest to have a weak yen to encorage the local industries to export more goods for expensive dollars.
Since they export more than they import it is a net benefit to their economy.

[kknight0506]

even the indian rupee is going on strong. it has been the best performing currency in asia for the whole year till now.

[dollarbear]

besides making the subprime problem worse, the other reason the fed won't raise rates in the short term is because the US economy is being entirely propped up by consumer spending which depends on cheap credit. a real catch 22.

[forexcranium]

The dollar is likely to fall a little bit againts the euro this week as meetings of the Federal Reserve and the European Central Bank bring interest rates back into focus. Just a pointer.

[forexcranium]

I think the dollar is set to move up. There is plenty of data this week that could allow the dollar to extend its modest gains versus the euro, while it also reaches a four-year high againts the yen. If you remember last week, the yen fell after the Bank of Japan left interest rates on hold at a superlow .5%. Personally I think the euro has topped out for now. The US economic reports this week are limited to the second-tier dataon durable goods orders and a pair of housing indicators, which I don't think will shift the market. The dollar has recovered 1.4% againts the euro. The dollar's gains come as investors start changing their views that favored a rise in euro-zone interest rates throughout the year.

Its my opinion that the market just does not seem that optimistic about Europe's growht outlooks.

[forexcranium]

I think much of Euro's price action was due to order flows - kinda hard to pin down what caused the dollars ebbs and flows againts the euro yesterday. There must have been a large institution buying dollars for yen, so this and other position-jockeying could have been responsible for the euro-dollar's moves.

[forexcranium]

The dollar's renewed upswing looks likely to persist this week as investors seem to have discarded the possibility of a cut in U.S. interest rates in the near future.

The central issue for currency traders this week is whether the market has overshot, and whether data this week -- including reports on retail sales and consumer prices -- will undermine or confirm the more upbeat view of the economy.