Currency specialist expect the USD to...continue to fall.
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An excerpt from today's report:
The dollar fell throughout the day Thursday with the Euro running up above $1.48. The employment data in the US was a non event, as jobless claims came in just as expected, but the volatile Phily Fed. Index dropped 24 points, over twice as weak as expected. More importantly, the Leading Indicators, a measure of the economy's future performance, declined for a fourth month. This data is just another indication that the US economy is in a recession which brought the rate cut talk back out in force. The FOMC continues to be more concerned with the growth of the US economy, and will likely turn a blind eye to all of the inflation warnings which have been showing up all over the data. I still look for our Fed to cut rates again at their next meeting, a cut which will enable traders to continue their assault on the US$.
And the markets agree with me. Speculation that the Fed will cut rates to stave off a recession while European policy makers keep rates on hold sent the Euro to over $1.485, the best level since the first day of February. In fact, the Euro has been steadily rising over the past two weeks, after it traded below $1.4450 after Trichet expressed concerns that the outlook for growth had deteriorated. But a report released yesterday showed growth in Europe's service industries accelerated more than economists forecast in February, prompting investors to reduce bets on ECB interest rate cuts.