Last week I wrote about the Dollar falling through the 80 € cent barrier ($1.25) to the Euro. I concluded with:
If November meets us with a Dow around 9,500, oil at $58, and a Euro at $1.27, it will not be good news for bush. On the other hand, it won't be good news for the rest of us or for Kerry: the forces in motion have enormous momentum and 2005 will be a difficult year regardless of who occupies the White House.
Well, it's not November 2 yet, but the Dow is down at a little over 9,700, the Euro hit 1.28 earlier today and is at 1.279 now, and oil is near $56 a barrel in New York today.
What does this mean?
Well, it means that whatever stopped the previous move of the Euro, about eight months ago, is no longer effective. It has a lot of momentum right now and as before, the key barrier is $1.30.
I have no idea what will happen, but our fundamentals are weak. The recovery seems to be evaporating, and the deficit is undermining our long term prospects. The European economies are not that robust, though, so it's hard to tell.
This week will be important. Watch for the Consumer Confidence, preliminary Q3 GDP, Durable Goods orders, ECI, PMI, and various indicators from Japan and the UK. Obviously also watch oil. Oild and the Q3 figures particularly may make for some good last-minute campaign fodder depending on what they do; not so the value of our currency, which does not register too much on Main Street America, wherever that is.
It's a shame my diaries on this subject from earlier in the year are not visible. A lot of what was discussed then may be happenning now.