Dollar Falls to 12-Year Low of 100 Yen

[GRG55]

Dollar Falls to 12-Year Low of 100 Yen
By Gavin Finch and Stanley White

March 13 (Bloomberg) -- The dollar fell below 100 yen for the first time since 1995 and to a record low against the euro after a Carlyle Group fund moved closer to collapse, triggering concern of more turmoil in financial markets.

The dollar was close to parity with the Swiss franc and slumped against the British pound after Carlyle said lenders will take over the assets of its mortgage-bond fund and President George W. Bush acknowledged the U.S. currency's decline was not ``good tidings.'' The dollar's drop may prompt Middle East central banks to reduce holdings of the currency, Greg Gibbs, a strategist at ABN Amro Holding NV in Sydney, said in a report.
`
`Investors are getting out of dollar assets and this is going to lead to a dollar crash,'' said Tetsuhisa Hayashi, chief currency manager of foreign-exchange trading in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan's largest publicly traded lender. ``The U.S. economy is getting worse.''

The dollar fell as low as 99.77 yen against the dollar, the weakest since Nov. 9, 1995, before trading at 100.15 at 9:24 a.m. in London, from 101.79 late yesterday. The dollar weakened against the euro to $1.5624, the lowest since the introduction of the common European currency in January 1999. It also slumped to a record low of 1.0060 Swiss francs. Against the euro, Japan's currency advanced to 156.21, from 158.30.

Japanese authorities sold the currency on all four occasions since 1995 when the yen approached the 100 mark in a bid to support exporters including Toyota, the world's second-biggest automaker. The Bank of Japan sold 14.8 trillion yen ($148 million) in the first three months of 2004, after record sales of 20.4 trillion yen in 2003...
http://www.bloomberg.com/apps/news?p...d=a8q2vC2.8OyU

[Guest]

Re: Dollar Falls to 12-Year Low of 100 Yen

GRG55 -

By north American west coast standards, you are "burning the midnight oil" over here , although it's the middle of the day for you. Must be a solitary vigil on the iTulip forums at this hour!

I've been on the phone half the night arranging to sell a bunch of silver (overseas, fully allocated individual acct. - so a bit complicated) to take profits - but with my screwed up timing this will be right before the US Dollar starts to go into it's real tailspin and the metals gap up another 20%.

I thought I was "taking profits", but now that I'm putting myself on outside of Gold / Silver for even just a few months I am immediately starting to feel like a patsy. Your post does not make me feel any better.

What's your sense of the dollar trajectory here? Are we ripe for some sort of temporary bottoming, or does it look like a possibly imminent real run may just get under way this spring? How does it look from your vantagepoint?

[GRG55]

Re: Dollar Falls to 12-Year Low of 100 Yen

GRG55 -

By north American west coast standards, you are "burning the midnight oil" over here , although it's the middle of the day for you. Must be a solitary vigil on the iTulip forums at this hour!

I've been on the phone half the night arranging to sell a bunch of silver (overseas, fully allocated individual acct. - so a bit complicated) to take profits - but with my screwed up timing this will be right before the US Dollar starts to go into it's real tailspin and the metals gap up another 20%.

I thought I was "taking profits", but now that I'm putting myself on outside of Gold / Silver for even just a few months I am immediately starting to feel like a patsy. Your post does not make me feel any better.

What's your sense of the dollar trajectory here? Are we ripe for some sort of temporary bottoming, or does it look like a possibly imminent real run may just get under way this spring? How does it look from your vantagepoint?

Darned if I know where the US$ is going to go next Lukester. I am just holding all my anti-Dollar positions for now. I would feel rather naked without my precious metal and Yen/Swissie allocations. My previous efforts to trade metal positions early in this bull market (circa 2003-04) proved counterproductive, so since then I have just bought on dips and held my positions for most part. Exception being the sale of a few non-performing junior gold stocks pruned out from time to time.

The US$ has looked very oversold for some time, and certainly silver looks like it hit an overbought exhaustion a short time back. But this has all the potential to turn into a Dollar rout as we break various technical chart points, with traders doing what traders always do - push the trend as far as possible until something "breaks". So what will break? Do we get a loss of confidence in the Fed and the currency, and the consequent parabolic moves in metals, oil, grains, Yen & Swissie. Not saying that is going to happen, just that the risk appears rather elevated.

Or do we get a perfect short squeeze with a violent snap back of the US$ as the Central Banks trap the shorts with a coordinated action? So far the ECB jawboning has had no effect holding back the Euro rise. And rumblings out of the BoJ have been just that - rumblings with no real action to halt the rise in the Yen. So far.

[Nicolasd]

Re: Dollar Falls to 12-Year Low of 100 Yen

Ciao Lukester ,

FWIW, I expect to see the USD plunge some more in the short term with the soon to be announced FED rate cut of March 18th and AU/AG to continue to rally.

I am buying more AU/AG this afternoon in ligth of the above

Regards,Nicolas

[c1ue]

Re: Dollar Falls to 12-Year Low of 100 Yen

Dollar sentiment in Russia is getting ugly.

I have a $3M deal which fortunately I switched to yen/ruble; that will net me an extra 10% just in the past 2 weeks.

Only regret is that I didn't capture the dollar fall benefits on my US exports by quoting prices in rubles :mad:

Now the customer is getting all of the upside.

[Guest]

Re: Dollar Falls to 12-Year Low of 100 Yen

Ciao Lukester , FWIW, I expect to see the USD plunge some more in the short term with the soon to be announced FED rate cut of March 18th and AU/AG to continue to rally. I am buying more AU/AG this afternoon in ligth of the above. Regards, Nicolas

AARGGHH! I have a sinking feeling you are right. Every time I've tried to trade a portion of these metals after big run-ups I get screwed! Stupid stupid stupid. Broke my own rule two or three times already now. If this humble metal is going to at least $50 why would any idiot want to sell it at $20. :mad:

(I need a smiley for kicking oneself around the block.) Quale idiota!

[Nicolasd]

Re: Dollar Falls to 12-Year Low of 100 Yen

Lukester,

Siete lontano da essere un idiot Tutta che abbiate bisogno di è pazienza prima di $50

Nicolas

[Guest]

Re: Dollar Falls to 12-Year Low of 100 Yen

Lukester, Siete lontano da essere un idiot Tutta che abbiate bisogno di è pazienza prima di $50 - Nicolas

Patience? You want me to have patience? Only market geniuses have patience!

[Steve Netwriter]

Re: Dollar Falls to 12-Year Low of 100 Yen

Darned if I know where the US$ is going to go next Lukester. I am just holding all my anti-Dollar positions for now. I would feel rather naked without my precious metal and Yen/Swissie allocations. My previous efforts to trade metal positions early in this bull market (circa 2003-04) proved counterproductive, so since then I have just bought on dips and held my positions for most part. Exception being the sale of a few non-performing junior gold stocks pruned out from time to time.

The US$ has looked very oversold for some time, and certainly silver looks like it hit an overbought exhaustion a short time back. But this has all the potential to turn into a Dollar rout as we break various technical chart points, with traders doing what traders always do - push the trend as far as possible until something "breaks". So what will break? Do we get a loss of confidence in the Fed and the currency, and the consequent parabolic moves in metals, oil, grains, Yen & Swissie. Not saying that is going to happen, just that the risk appears rather elevated.

Or do we get a perfect short squeeze with a violent snap back of the US$ as the Central Banks trap the shorts with a coordinated action? So far the ECB jawboning has had no effect holding back the Euro rise. And rumblings out of the BoJ have been just that - rumblings with no real action to halt the rise in the Yen. So far.

IMO you know exactly where the US$ is going And your post matches my position pretty well.

[c1ue]

Re: Dollar Falls to 12-Year Low of 100 Yen

I'm wondering how the price of oil for Japan compares with the hit the Japanese economy takes when their dollar payments for exports hit the books at home.

According to:

http://www.us.emb-japan.go.jp/englis...erview2007.htm

In 2005, Japan ’s imports from the United States account for 12.4% of Japan ’s total imports. Japan ’s exports to the United States make up 22.5% of Japan ’s total exports. For the United States , Japan accounts for 8.2% / 6.1% of the U.S. imports / exports, respectively. Japan is the largest trading partner of the United States among all the non-NAFTA (North American Free Trade Agreement) member nations and the largest importer of the U.S. farm products. Also, Japan ’s foreign direct investment in the U.S. totals $190 billion.

Given that total exports for Japan are $518B, that implies $116.55B of exports to the US.

http://www.buyusa.gov/japan/en/mom.html

The same link says total imports to Japan are $598.3B.

Japan's oil imports, on the other hand, were roughly 5.2MPD for the past 12 months since November 2007, of which 80% is from the Persian Gulf, and the majority of that from the UAE and Saudi Arabia.

http://www.eia.doe.gov/emeu/ipsr/t38.xls

So assuming a mean price per barrel of $70 from December 2006 to November 2007, that's $132.8B.

Hmm interesting, it means that Japan's oil import cost is greater than Japan's official total US exports, and this was at $70/barrel.

Perhaps there won't be an intervention from the BOJ...