I just got through read an article relating to the US dollar, Euro interest rates and Gold. It was a very interesting read but I can't copy and paste it here as it is a copy right article. The basis of it was explaining the ECB decision not to lower interest rates as they see significant inflation since last autumn. The writer proclaims that the ECB is reluctant to follow the U.S. Federal Reserve in cutting borrowing costs as soaring food and energy prices drive inflation above 3 percent in the 15-nation euro region. The International Monetary Fund estimates economic expansion will weaken to 1.4 percent this year from 2.6 percent in 2007 after the U.S. housing slump pushed up the cost of credit worldwide.
Why is this important? Well the writer of the article is stating his claim that the Euro will go as high as $2 against the US dollar and this will consequently lead gold prices to $1650, if that happens. I am keeping a close eye on this as this I believe will have drastic consequences to the US economy.
Thursday, May 8, 2008
Market lifeless
Market is so dead today I wouldn't be surprised if we match monday's volume as the lowest volume day of the year.
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