Dollar Rallies Off Lows

U.S. 10-year Treasury bond prices fell today, on
positive sentiment from new records in the U.S. equities market, and a decrease
in initial jobless claims. Bond prices usually move down on economic strength
and up on weakness; earlier this week, traders bought bonds on a weak housing
report and falling consumer confidence. Today’s move lower puts bond prices a
little lower than where they were before the spike early in the week.

The yen plummeted today against the dollar and
the euro, falling to new record lows against the European currency. The
dollar also rose against the euro, on strength from a positive unemployment
report from early in the day. Fewer initial jobless claims were filed last week
in the U.S., but total jobless numbers could point to some weakness in growth.
Accelerating business costs and housing sector fears could lead to staff
reductions across the country, leading some investors to fear that next week’s
employment reports could evidence weakness. Despite the soft aspects of the
report, the dollar rallied on the news. The euro has been breaking new records
against the yen for weeks now, but the dollar managed to stave off euro
strength, on positive sentiment from the morning U.S. unemployment report.

Crude oil futures slid ABOUT 1% today, on reports
progress in nuclear talks between Iran and the EU. Iran has been a major concern
for oil traders, and any geopolitical tension with the country has led to prices
spikes recently. Both the latest UK/Iran situation and the rally to record
prices this summer illustrate crude’s sensitivity to Middle East tensions. Crude
has been trading in a 10-point range for about a month now. natural gas futures
fell over 2% today on warm weather across the country.

Gold futures fell about 1.5%, the most in 8
weeks, as the dollar strengthened of major lows against the euro. Gold usually
trades inversely to the dollar and with oil, and it was today’s dollar strength
that dominated gold trading. Traders sold gold to buy the dollar, which sent the
precious metal lower. Copper fell nearly 3% on slowing U.S. housing

Grains traded mixed today. Soybeans fell about
0.4%, corn fell around 1.4% and wheat gained fractionally.


unemployment claims fell by about 20k last month.

John Lee

Associate Editor