For everyone's else's consumption. All market data in the comming week is likely unfavorable to dollar.
And another fact to consider is that Saudi inflation has jumped 8% recently because the Saudi Central Bank has to cut rates to match the FED. Saudi's are a spoiled lot when it comes to prices. They live in a world where an apple costing 1 riyal should also cost 1 riyal 20 years later. The Saud family is facing slack from the people because of recent inflation. Currently their central bank is trying to control inflation by increasing the depositary requirements of banks to curtail money supply. However another Fed cut will hurt them bad. They may have to seriously think about dropping the dollar peg and moving towards a more independent economy with the Euro as a possible future currency of choice... ...?!
The above news is again a two edged sword. A more independent Saudi economy means a weaker dollar, stronger oil and higher Gold. The next rate cut although only 50 points might have the effect of a 1.25 cut on dollar weakness. On the other hand Saudi concerns/sky rocketing commodity prices might influence the Fed to weigh the possible repercussions on a extremely weak dollar worldwide. They might delay the rate cut to avoid adding fuel to the already blazing fire.
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發表於 2008-2-24 19:20:54
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