Federal Reserve’s Trillion Dollar Debt-Buying Plan Eases Lending and Zaps the Greenback

While the U.S. Federal Reserve’s plan to buy more than $1 trillion in debt has helped unfreeze the credit markets, it has also effectively capped U.S. Treasury yields and undermined the dollar. And that’s caused commodities to soar as currency speculators and safe-haven investors head for higher ground.

At the culmination of the policymaking Federal Open Market Committee’s (FOMC) two-day meeting Wednesday, Fed Chairman Ben S. Bernanke revealed that the central bank would purchase up to $300 billion in longer-term Treasury securities, as well as an additional $750 billion of mortgage-backed securities. The central bank also said it would buy debt issued…

US SESSION: DOLLAR CLOSING THE WEEK STRONGER ACROSS THE G10

The dollar gained substantially against most of the majors recovering most of this week’s losses. The EurUsd sunk over 360 pips to the high range of 1.38, while the UsdJpy was mostly flat up only 7pips to mid 89 price area. The GbpUsd dropped an additional 160 to the mid 1.48 level, due to several factors including weak economic conditions. Equity markets have traded traded closely to yesterday’s levels with the Dow and SPX virtually unchanged. Bond have given up light ground with 2yr and 10 yr yields higher by 5bps, but remain considerably lower from average levels. The commodities…

Jim Rogers: The dollar is a flawed currency

Excerpts from The Financial Times’ View from the Markets online interview with Jim Rogers:

FT: It’s a year since we last interviewed you. You were aggressively bearish about the dollar, but you thought there would probably be a rebound and you would take that as an opportunity to further get out of the dollar. Have you made a further exit from the dollar?

JR: Not yet, no. And the reason I haven’t is because we’re in a period of forced liquidation of everything. We’ve only had eight or nine periods like this in the past 150 years, where everybody has to reverse their positions on everything.…

US SESSION: SELLERS CONTINUE TO DRIVE MARKETS SOUTH JPY STRENGTHENS

The dollar seems to be breaking away from the risk aversion trade which has been the persistent theme in the marketplace. The EurUsd rose nearly 130 pips to the low range of 1.26, while the UsdJpy moved 50 pips to the downside trading at the mid 96 price area. The GbpUsd rallied over 300pips to the low 1.50 level, recovering some of last week’s losses. Equity markets opened lower in the US with the Dow down 1.2% or 100pts, the European stock indexes are negative as well with the DAX off 2.1% or 100pts in intraday trading. Bond yields are…

The Best and Worst a Dollar Will Buy

I am going to use this edition of Charts of the Week to accomplish a series of tasks that has gone undone for too long.  Forthwith:

1. To answer a brainless dolt called James West, whose name appears with some regularity on the otherwise respectable Kitco website.  This “writer” [oh, if only he could string a few words together without obfuscating] produced this gem just a week ago:

“Right now, the dollar is looking strong because of the massive repatriation of U.S. dollars now underway as a result of global U.S. denominated asset de-leveraging. So it looks [the “writer’s” emphasis] like the dollar is strengthening. This…