There is a kind of a conundrum, a paradox in the markets where people are looking for an answer but not finding one.
The dollar.
Why is the dollar strengthening where the mighty currency normally should dive.
Nobody can solve this one, it seems.
A safe haven?
Less vulnerable than his peers?
Well, a currency market – as most other markets – moves with offer and demand.
Not with someone’s best guesses.
This observation comes from Mike O'Rourke of BTIG
The first and most obvious consideration is that the Treasury needs to sell $2 Trillion of Government Securities this year. With low current yields, the currency strength is a key attraction to buyers. Permitting the Dollar to strengthen aids Europe in taking on its economic challenges, which are deemed by many to be more severe than those here in the U.S.
This is one explanation.
A good thing that Mike mentions Europe.
Europe needs dollars. Tons of dollars. To finance their dollar books.
Another thing is that maybe it is not the dollar strengthening but other currencies weakening.
Data released by the Washington-based Commodity Futures Trading Commission on Friday showed that the "net short position" of trades against the euro by hedge funds and speculators almost doubled in the week to March 3 to 19,431 contracts from 10,081 contracts a week earlier.
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The dollar.
Why is the dollar strengthening where the mighty currency normally should dive.
Nobody can solve this one, it seems.
A safe haven?
Less vulnerable than his peers?
Well, a currency market – as most other markets – moves with offer and demand.
Not with someone’s best guesses.
This observation comes from Mike O'Rourke of BTIG
The first and most obvious consideration is that the Treasury needs to sell $2 Trillion of Government Securities this year. With low current yields, the currency strength is a key attraction to buyers. Permitting the Dollar to strengthen aids Europe in taking on its economic challenges, which are deemed by many to be more severe than those here in the U.S.
This is one explanation.
A good thing that Mike mentions Europe.
Europe needs dollars. Tons of dollars. To finance their dollar books.
Another thing is that maybe it is not the dollar strengthening but other currencies weakening.
Data released by the Washington-based Commodity Futures Trading Commission on Friday showed that the "net short position" of trades against the euro by hedge funds and speculators almost doubled in the week to March 3 to 19,431 contracts from 10,081 contracts a week earlier.
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