Interest Rate Roundup

Wednesday, November 04, 2009

CNBC says "Sell the dollar?"

That was interesting. CNBC just carried a report from Steve Liesman , the gist of which was (in my humble opinion) "Go ahead ... sell the dollar!" Specifically, Liesman said that unnamed policy officials told him the U.S. government view is that the dollar decline is no big deal. The decline is orderly, it just reflects a retracement of last year's big move, and it's nothing to get all worked up about. Supposedly, there are contingency plans in place should the move get disorderly. But as long as that doesn't happen, no worries. That's how I'm paraphrasing the report, anyway.

Now I'll be the first to admit that the market already "knows" the Fed and Treasury don't care about the dollar. But using a plugged-in reporter to essentially communicate that view publicly, on live financial television, is pretty noteworthy. If the Fed does what I expect them to in a few hours (NOT signal any shift toward tightening) the buck could get creamed here. We'll see ...

1 Comments:

  • Yes, I saw that as well. Steve Liesman's words were more of a further confirmation rather than a phenomenon of breaking news.

    I view the promotion of dollar depreciation, in part, as a method of counteracting China's unwillingness to allow the yuan to appreciate. That, and it's obvious implication in debt servicing.

    By Anonymous Anonymous, at November 8, 2009 at 12:50 PM  

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