Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

[Slimprofits]

http://online.wsj.com/article/SB124286044650341037.html

"Some members noted that a further increase in the total amount of purchases might well be warranted at some point to spur a more rapid pace of recovery," according to the minutes. The central bank has previously said it would buy as much as $1.45 trillion of mortgage-related securities, as well as $300 billion in longer-term Treasury securities.

[ThePythonicCow]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Drive it down, or drive it up, or no affect ??

I can imagine the Plunge Protection Team (PPT) intervening a little bit, in anticipation of the downward push you asked about. The end result could be up, down or a wash.

Moreover, the likelihood that either one of us knows what are the real primary drivers of the dollars exchange rates today or tomorrow are only slightly better than zero .

[Jay]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Drive it down, or drive it up, or no affect ??

I can imagine the Plunge Protection Team (PPT) intervening a little bit, in anticipation of the downward push you asked about. The end result could be up, down or a wash.

Moreover, the likelihood that either one of us knows what are the real primary drivers of the dollars exchange rates today or tomorrow are only slightly better than zero .

We all live in Las Vegas now!

[Slimprofits]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Bill Gross tells Reuters that the U.S. will lose its AAA rating

http://www.bloomberg.com/apps/news?p...KIw&refer=news

The dollar headed for its biggest weekly drop in two months versus the euro after Pacific Investment Management Co.’s Bill Gross said the U.S. will “eventually” lose its AAA credit rating. The pound rose in the week against the dollar even after Standard & Poor’s lowered its outlook for the U.K.’s top credit rating.

“The impact of a possible downgrade on the U.S. would be much greater than the one on the U.K. because the dollar still represents 60 percent of the global foreign reserves,” said Hidetoshi Honda, a currency strategist at Mizuho Corporate Bank Ltd. in London. “We’d expect massive outflow of dollars from foreign reserves so that is dragging the dollar lower.”

http://www.reuters.com/article/busin...54K5GC20090521

Asked what is driving the market declines, Gross told Reuters via email that investors fear the U.S. is "going the way of the U.K. -- losing AAA rating which affects all financial assets and the dollar."

Thursday, Standard & Poor's lowered its outlook on Britain to "negative" from "stable," threatening the nation's top AAA rating. Britain faces a one in three chance of a ratings cut as debt approaches 100 percent of gross domestic product.

[cjppjc]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Bill Gross tells Reuters that the U.S. will lose its AAA rating

http://www.bloomberg.com/apps/news?p...KIw&refer=news



http://www.reuters.com/article/busin...54K5GC20090521

Gee, Are you in the news business. Bill Gross did not say "U.S. will lose its AAA rating."

The article said:

Gross told Reuters via email that investors fear the U.S. is "going the way of the U.K. -- losing AAA rating which affects all financial assets and the dollar."

[Slimprofits]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Gee, Are you in the news business. Bill Gross did not say "U.S. will lose its AAA rating."

The article said:

Gross told Reuters via email that investors fear the U.S. is "going the way of the U.K. -- losing AAA rating which affects all financial assets and the dollar."

No, I am not in the news business and that was an honest mistake.

How about half credit for including the excerpt with the quote?

[metalman]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

No, I am not in the news business and that was an honest mistake.

How about half credit for including the excerpt with the quote?

we all get carried away sometimes. he almost said the usa was due for a ratings cut... but... doesn't the usa own the ratings agencies?

[BadJuju]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

we all get carried away sometimes. he almost said the usa was due for a ratings cut... but... doesn't the usa own the ratings agencies?

Ratings Agency: Your rating is being downgraded, USA.
USA: We are the USA. Our word is as good as gold.
Ratings Agency: The facts speak differently.
USA with guns: No, really.

:cool:

[Slimprofits]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

we all get carried away sometimes. he almost said the usa was due for a ratings cut... but... doesn't the usa own the ratings agencies?

I like this quote about the ratings agencies from Giles Keating, head of research at Credit Suisse:

""I just see this as perhaps S&P doesn't have the nerve to downgrade the US or to put the US on watch, and so it's doing it to the UK. So this is really a warning shot across the bows of the US, and I think that is big news, actually."

Why no nerve? Fear of some kind of political retribution?

[ASH]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Why no nerve? Fear of some kind of political retribution?

Not necessarily. Downgrading the credit rating of the US could be a very big deal. It would definitely harm sentiment, and it would probably have real practical implications for federal borrowing costs, mainstream assumptions about America's capacity to conduct fiscal stimulus, and therefore mainstream assumptions about the future trajectory of the American economy. It could very well shake the international financial order. Even absent the threat of political retribution, the staff of a rating agency might well hesitate to take an action, albeit justified by data, when they know that doing so could trigger world-wide ructions. After all, they also live in the world, and almost nobody's interests are served by a sudden and sensational development at the base of global finance.

[blazespinnaker]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

What must be very concerning is the steep drop in treasuries after this statement. It's almost as if the fed has lost the ability to manage the long bond, even with their unlimited purchasing power.

[blazespinnaker]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

Not necessarily. Downgrading the credit rating of the US could be a very big deal. It would definitely harm sentiment, and it would probably have real practical implications for federal borrowing costs, mainstream assumptions about America's capacity to conduct fiscal stimulus, and therefore mainstream assumptions about the future trajectory of the American economy. It could very well shake the international financial order. Even absent the threat of political retribution, the staff of a rating agency might well hesitate to take an action, albeit justified by data, when they know that doing so could trigger world-wide ructions. After all, they also live in the world, and almost nobody's interests are served by a sudden and sensational development at the base of global finance.

I agree .. aren't US treasuries the very definition of AAA? If the US loses AAA status, then the world is a very very scary place.

[cjppjc]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

No, I am not in the news business and that was an honest mistake.

How about half credit for including the excerpt with the quote?

Okay, you get the half credit. :cool: Sorry, I've got a hard on for the media lately.

[xela]

Re: Does this after-hours announcement from the Fed drive the dollar down further tomorrow?

If the US loses AAA status, then the world is a very very scary place.

Some say the US is past the point of no return, and thus it's 'when, not if'.