Worries over the Iran situation escalated over the weekend. I do not know how likely it is that some of the scary things that surfaced will come to fruition but events like this usually cause the dollar to rise and treasury yield to fall. My gut tells me that the dollar may weaken if the US engages in another war theater.
I cannot defend the fundamentals of this thought because this is not how it usually works. I will concede the fundamental argument and just say it is a gut feeling.
On another currency-related note here are some countries that have current account surpluses according to Everbank; Sweden, Norway, Switzerland, Denmark, Canada, the Eurozone and "all the Asian countries."
Here is a link to a story from Reuters about China and currency reserve issues passed along to me from a reader.
Wikinvest Wire
3 comments:
Often times, when there is any kind of geo-political situation in the world, currency traders rush into the Swiss Franc. They are still considered the safe haven of the world. However the currency hasn't seen the big push that it normally does with all the headlines that Iran has been garnering. As currency traders, we are seem to be getting numb to the notion of any kind of conflict in Iran. As the news starts to get a little closer to action occuring, vs. current rhetoric of "They're a problem". we'll start to see the dollar dip from this and the Swissy move up.
Roger,
It escapes me right now, but do you have of the market that was set up to measure the risk of geo-political events? It was a government think tank idea. In any case if you find it, what do you think "the market" is saying about a military strike on Iran's nuclear cpabilities?
Jeff I think you mean http://www.tradesports.com/
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