Forget the yellow brick road.
Follow the dollar. It rallied today for the third straight time. Seen as a safe haven, higher yielding or whatever, it seemed to take its cue from calmer markets and oil prices that were down but not significantly at the close.
The DOW finished up 117 and the S&P 500 plus 15. Oil though, as noted, slightly down for the session finished above $30 a barrel. If you've been in commodity-based currencies like South Africa, Norway, Canada, New Zealand and Australia you know what real pain feels like. So any respite the falling oil prices lends a bit of relief to these puppies.
Speaking of Canada and its loonie, the U.S dollar hit C$ 1.492 today, a level not seen since early 2003. Part of the loonie weakness, some suggested,,was owing to weak manufacturing, consumer sales numbers and employment figure that stemmed from over-confident central bank releases.
MarketWatch.com reported:They’ve maintained a fairly upbeat, optimistic outlook on the economy, and it’s difficult to see how that optimism is being sustained in the face of obvious weakness in the domestic side of the economy,” said Shaun Osborne, chief currency strategist at Scotiabank.
Many market strategists believe that the central bank’s projections for growth and inflation have been unrealistic, and that the central bank may soon cut rates, possibly at the central bank’s meeting on Jan. 20. The central bank’s overnight rate currently stands at 0.5%.
But as the late Yogi Berra once noted: "It ain't over until it's over."
The bottom line is China and oil remain on investor minds the dollar closed at 98.996 against a basket of currencies, up 0.3% on the day. The British pound weakened 0.8% against the greenback to settle just below $1.45 at $1.4439, pulled down some are saying owing to weak manufacturing, after earlier hitting it biggest decline since 2013 in November.
We keep telling you: Watch out for those central bankers.
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