The Dollar Receives Some Stimulus
Good day… We had a pretty calm day in the markets yesterday, as the dollar drifted lower versus most of the major currencies. But when the Europeans picked up the trading overnight they all but wiped out any advances the currencies had made, and the dollar is now sitting slightly higher than it was trading at this time yesterday morning. But I will get to that later; let me start this morning's Pfennig off with some comments Chuck left me on the markets as he signed off his computer last night:
"OK… So quite a few of you liked my conspiracy theories yesterday, and even a few had some of their own! This whole mess of Bernanke and Paulson finally sitting up and taking notice in June is just too much for me. I think there's got to be a story here that we don't know about… Yet!
"The euro (EUR) which was hovering around 1.55 yesterday as I signed off, got a lift when a different European Central Bank (ECB) member, Orphanides, followed up ECB member Stark's comments that sent the euro lower, with a different statement. Orphanides decided that it was better to come clean and tell the markets that he 'can't rule out the need for more rate hikes after the July hike'. You may recall that yesterday I told you ECB member Stark had said, 'However, we are not talking about a series of rate increases.'
"It's not often that the ECB members sing from a different song sheet… But I like Orphanides comments, and so did the markets!
"We saw the color of the Fed's Beige Book (pun intended!), yesterday… And if I could use just two words to describe what the Fed Heads were discussing, they would be: 'Generally Weak'. Here's a snippet of the report from the Fed… 'Comments from retailers not particularly impressive as sales "slowed further" since the last report, but we still think strong sales at discounters will boost retail sales for May'."