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发表于 2009-11-25 12:03 PM
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The ensuing wave of declining US dollar is accompanied by unusual yen strengthand relative oil weakness, suggesting that the intermarket dynamics shaping risk appetite may be starting to fade.
The Federal Reserve is once again the culprit to the latest USD selling after the FOMC minutes described the USD’s depreciation as "orderly".The Fed’s role in driving USD weakness becomes more significant as currency traders sell the currency without the habitual characteristics of risk appetite to prevail. Throughout the year, weakness in the US dollar and Japanese yen had predominantly emerged in lockstep as these low yielding currencies financed higher-yielding currencies and assets (equities and commodities). But since the Nov 4th FOMC statement, Fed rhetoric has incessantly reiterated the USD-negative mantra of"low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period" throughout its speeches.
Consequently, accelerating USD selling is no longer taking place with the usual advances in oil prices. The inverse correlation between USD index and US crude oil weakened from -0.75 in October to -0.56 in November (1st-25th), while the correlation between EURUSD and crude fell from 0.9 in October to 0.49 in Nov. This could well be a case of oil bulls unable to keep up with USD weakness, especially as the lack of broad follow-up in global equities may not warrant real demand for oil prices to regain its $82.00 highs of the year.
Considering oil’s deteriorating fundamentals despite USD weakness, oil would likely be among the first victims of unwinding carry trades from equities and profit-taking from metals. |
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狗仔卡
发表于 2009-11-25 11:58 AM
