" The dollar was hit Wednesday."

[donsu]

http://www.atimes.com/atimes/Global_Economy/GA28Dj02.html


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So far we have found out that China "really doesn’t like the dollar". OK, there's a simple solution flowing from my simple red-neck mind. Stop shipping those millions of tractor trailers packed with consumer stuff to WalMart and you wouldn't get so many of those dollars you are growing to dislike. And the rest of us would be spared WalMart's screed on how "good it really is for America" to only buy Chinese goods at "everyday low prices". (Sorry, my disrespect for the "free-trade hypocrisy" is seeping through a bit. I wonder if anyone at Davos has ever shopped at WalMart. I'm not sure, but there may have been some Dior and Hermes stuff on isle #47 - I think they were right there next to the fishin' reels.)

But think about it. What an elegant solution. If China abandons WalMart, the US current account problem will improve. Mr Warren Buffett (oh ye fine financial deity who does the Davos circuit) will then have no reason to trash the dollar - thus closing his rather larger short position he likes telling us about. The dollar rises and China, sitting on a pile of shrinking euros, yen, and Turkish lira, begins to realize that sometimes it doesn’t make sense to bite the hand that feeds you. But I don't think this potential solution is open for debate on the mountain top.

The dollar was hit Wednesday. We could blame the comments from the Chinese that they plan to reallocate some of their dollars into other currencies. We could blame it on the news the day before that President George W Bush, a wanna-be fiscal conservative who can never seem to locate his veto pen, will produce yet another blow-out deficit - just shocking! We could blame it on global warming, a Davos favorite this year. Or we can place the blame squarely where is should be placed - “loony” behavior in the market - full moon on Wednesday. But since the dollar is moving higher again Thursday, does it matter what or who we blame?

The buck has chopped up and down within a 200 PIP range against the euro over the past eight sessions (Thursday may make nine). There have been plenty of good reasons to sell the buck. Technically, the dollar looks overbought near-term. And yet, someone seems to be buying dollars.
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the money suits are all ascramble