Dollar Down, Gold Up

U.S. 10-year Treasury bonds were fractionally changed today, after giving up
gains on widespread negative sentiment. Traders are starting to bet that the Fed
will be forced to cut rates again before the year is out, a warning sign for
economic weakness and slowing growth. Bonds have risen steadily since the
beginning of July on pervasive economic worries, but fell back on anticipation
of a rate cut.

The dollar fell to new all-time lows versus the euro, as traders bet that the
Fed would cut rates again before the year is out. The dollar has been
free-falling against the euro since mid-August when the credit crisis was in the
midst of unraveling. The dollar was also down against the yen, on overall
negative U.S. sentiment. The yen has been trading within the carry trade dynamic
lately, falling on equity weakness and rising on equity strength.

Crude oil fell slightly today, down about 0.3%, after hitting new record
highs earlier in the session. Crude has been gaining steadily since the end of
August, on worries that Q4 demand will outpace supplies. Crude sank through the
first half of August on economic growth worries, but has since turned around and
hit new record highs. Natural gas futures were down less than 1%.

Gold rose to 28 year highs today on a weakening dollar today. Gold normally
trades inversely to the dollar and with oil. Today, traders focused on dollar
weakness and bought gold for safety. Gold has been rising lately on the
oil/dollar dynamic. Copper futures fell about 0.4%.

Grains fell across the board. Soybeans dropped 1.7%, and corn dropped 3.6%.

Stocks declined on Friday, with financial stocks struggling once again.
The recent credit market woes, coupled with the slumping housing market continue
to put pressure on the financials. Click

to read the rest of today’s

Stock Market Recap

Economic News

Consumer spending rose more than forecast
in August, +0.6%.