Drudge Report Blamed for Declining US Dollar, Increase in Stupid Hats

Really Politico? This is the best explanation you could come up with? That the decline of the US Dollar is because Matt Drudge is linking to stories (not writing them, mind you, just LINKING TO THEM) on his site, The Drudge Report?  Yes, shoot the messenger. Surely it has nothing to do with our massive national debt, bloated government, or lack of a clean plan of how the US will really reshape its economy.

And don't call me Shirley!

On Tuesday, Matt Drudge ran a headline about the weakening U.S. dollar on his website, Drudgereport.com. In and of itself, that would be unremarkable, except that it was the 18th time Drudge had posted a link to a story about the weak dollar this month.  And October was only 20 days old.

Clearly, Matt Drudge has developed a fascination with the declining U.S. dollar.  “He’s fixated on it,” said Tom Rosenstiel, director of the Pew Research Center’s Project for Excellence in Journalism. “There’s no question that Drudge can alter what people are paying attention to.”  Market watchers say it’s unlikely that Drudge is actually moving the currency markets with his relentless attention.

“I don’t think that anyone who seriously trades currencies reads The Drudge Report before making important buy or sell decisions,” said Chris Roush, a professor of business journalism at the University of North Carolina at Chapel Hill.

But Drudge does have the ability to put news items on the radar screen of major media outlets and political figures in Washington. And other people are paying attention to Drudge, too: A source close to the U.S. national security community said that Drudge’s link to a story in the [London] Independent earlier this month instantly grabbed the attention of senior American officials.

Zeroing in on the dollar's decline - Eamon Javers - POLITICO.com

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Australian Dollar Breaks 93 US Cents, Strongest Since August 2008

You have to wonder how bad things are getting when the Australian dollar starts to kick the US Dollar's ass. How long does it take to fly down there?

The Australian dollar briefly rose above 93 U.S. cents as the central bank said it was “possibly imprudent” to keep borrowing costs at a half-century low in minutes of its October meeting. New Zealand’s dollar slipped.  The so-called Aussie traded near its strongest since August 2008 as Reserve Bank of Australia policy makers said keeping rates at “very low levels” for an extended period risks higher inflation. Futures traders are betting on a more than 30 percent chance the benchmark rate will rise another 75 basis points by year-end. Demand for the two South Pacific currencies was trimmed on speculation gains this month have been too rapid.

“The market has taken the RBA minutes as reasonably upbeat, but it’s already there in terms of the rates priced in for year- end,” said Phil Burke, chief foreign-exchange dealer at JPMorgan Chase & Co. in Sydney. “The dips are going to be very shallow because there’s strong underlying sentiment for Aussie dollar, but it’s going to be a slow grind higher.”

SOURCE: Australian Dollar Breaks 93 U.S. Cents on Central Bank Minutes - Bloomberg.com

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Broad US Dollar Sell Off Likely to Continue

Well, that's what the guy's in Hong Kong are saying right now . . . and they're the one's with all the real money, so maybe we should listen to them, eh?

A sell off in the U.S. dollar continued globally as investors switched to riskier assets, leaving the Hong Kong dollar at the strong end of its trading band against the U.S. unit late Tuesday.   The U.S. dollar will likely stay weak and hover near HK$7.7500 in the near term, traders said.

In late Asian trade, the U.S. dollar was at HK$7.7501, unchanged from late Monday. The U.S. unit was also fixed at HK$7.7501 earlier Tuesday. "The U.S. dollar's broad weakness has prompted selling by both investment and commercial banks, which could trigger an intervention by the Hong Kong Monetary Authority later," a senior trader from a U.S. bank said.

Under Hong Kong's currency board system, the Hong Kong dollar is allowed to trade between HK$7.75 and HK$7.85 to the U.S. dollar.  The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 201 points to the spot rate, compared with a 188-point discount late Monday.  "I saw many selling positions for the U.S. dollar by local and foreign banks. I don't see any sign of a turnaround in the near term," another trader from a U.K. bank said.

SOURCE: HK Dlr Steady Late; Broad US Dlr Selloff Likely To Continue - WSJ.com

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Won Crushes Yen as US Dollar Substitute

Got a yen for the Won? Apparently the rest of the world does.

Asian central banks are running out of ammunition to fight their currencies’ biggest rally since 1998, paving the way for South Korea, Taiwan, Indonesia, Thailand and India to help lead foreign-exchange performance next year.  JPMorgan Chase & Co.’s index of Asian currencies has risen 5.6 percent since its strongest two quarters in 11 years began March 31. Of 34 currencies ranked by Bloomberg forecast surveys, the won, Taiwan dollar, rupiah, baht and rupee will be among next year’s dozen strongest, median estimates show. The won has the best prospects and is the second-most undervalued of 16 major currencies as measured by purchasing power.

SOURCE: Won Crushes Yen as Dollar Substitute in Asian Rally (Update3) - Bloomberg.com

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Dollar Heading Down, Natural Resources Heading Up

Where is your money safer these days: the US Dollar or in natural resources like gold?

Gold's proven ability to bust cleanly through the $1,035 level — and now the $1,050 level — confirms what I've been saying all along:

A coordinated international effort to replace the U.S. dollar as the world's dominant reserve currency is now well under way ... and gathering steam.

Consider the gathering forces that are now converging and pummeling the U.S. dollar in international markets ...

The G-20 countries, now largely in control of the world's economic caretaking, are turning the U.S. into just one of many countries setting the rules for our future.

SOURCE: HoweStreet.com - The Source for Market Opinions

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