Euro Without A Cause

  • October 25, 2000
  • Marc Dupee

The Euro is making an assault on new lows as traders find the
moment opportune to further bloody the troubled currency. One month after the
first coordinated intervention by governments to support the beleaguered
single-currency unit, traders see little threat of a new round of
euro-buying/dollar-selling. 

Recent comments from the European Central Bank basically
pulled the rug of support out from underneath the euro after Wim Dusenberg said
it would be inappropriate for the ECB to intervene in response to the crisis in
the Middle East. Further, empirical studies show that intervention does not work
except when done in a coordinated fashion by the world’s major governments
simultaneously. The US Treasury is unlikely to take action with a Presidential
election less than two weeks away. Also, Treasury Secretary Summers made
comments Tuesday underpinning a strong dollar. Interest rates and economic
growth remain higher in the US than in Euroland, which are fundamentals hurting
the euro.

Both the euro FX
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Implosion-5 List.
Both are also making good on Off The Blocks
setups. 

Equity index futures are getting whacked after the
disappointing reception of Nortel’s
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Naz 100 networking components
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spanked in sympathy, driving down
NASDAQ 100 futures
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Three signals from the
Market
Bias Indicators Page also suggested that index futures could trade
lower. 

Bear in mind that once, and if, equities get back on track,
we should see another rally to new highs in Momentum-5
List member December  dollar index futures
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PowerRating), which
are up a hefty 1.14 on the session to 118.48.

Energy markets are down despite a much
lower-than-expected build-up in stockpiles of crude and distillates. The market
appears to be bracing for an increase in OPEC production as its price-band
mechanism kicks in (this is where the cartel increases output when the price of
an OPEC barrel of crude remains above $28 a barrel for more than 20 days). 

Cocoa
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gains on news that the military figure who claimed victory in last weekend’s
election in the world’s largest producer of cocoa, the Ivory Coast, has fled the
capital after tens of thousands protested.