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Europe
Euro May Decline for a Fourth Day as French Rioting Escalates
2005-11-09
Hat tip to Orrin Judd.
Nov. 8 (Bloomberg) -- The euro may weaken for a fourth day against the dollar in Asia on concern rioting that has escalated in France over the past week will spread across Europe. Social disorder may damp economic growth and deter investment in euro-denominated assets. The riots, which entered their 13th 11th night, mark the longest stretch of urban violence in Europe's second-largest economy since the student uprising in 1968.

``The riots are spreading across France and into Germany and Belgium, bringing about huge adverse effects on the euro,'' said Michiyoshi Kato, a vice president of foreign exchange sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-biggest lender by assets. ``Acts of violence will surely continue to weigh on the euro.''
I recall something about US Treasury bills being a pretty safe investment.
Against the dollar, the euro traded at $1.1781 at 9:46 a.m. in Tokyo, from $1.1805 late yesterday in New York, according to electronic foreign-exchange dealing system EBS. The euro was at 138.69 yen, from 138.92. The euro may fall to $1.1760 against the dollar today, Kato said.

Losses in the euro may be limited after European Central Bank President Jean-Claude Trichet yesterday said the bank is ready to raise interest rates to curb inflation across the dozen-nation region. Trichet said the bank is ready to lift rates ``at any time'' to curb inflation and pledged ``strong vigilance'' against the risk that this year's 38 percent surge in oil prices will push up broader inflation.
Raising interest rates will certainly help create the millions of jobs the French need for their citizens.
The ECB has kept its benchmark rate at 2 percent since June 2003, and Trichet Nov. 3 said that level is ``still appropriate.'' ``Trichet's comments last week disappointed the market and pushed down the euro,'' said Hideki Hayashi, a currency strategist at Shinko Securities Co. in Tokyo. ``It seems he intended to support the euro this time around by signaling higher rates, as the weaker euro could lead to inflation.''

European finance ministers at their monthly meeting in Brussels yesterday urged the ECB not to be hasty in raising rates. Comments from Finance ministers are the same as before and neutral to currency markets, Hayashi said.
Posted by:Steve White

#10  Whenever I hear about Warren Buffet, having heard about his odd mansion outside Omaha, NE, I picture him in a green bathrobe, wearing bunny rabbit slippers, in front of his computer, on the internet to some commodoties house, and on two cell phones at once, screaming, "SELL! SELL!"... SCARY!
Posted by: BigEd   2005-11-09 15:39  

#9  Warren's likely to get whipsawed.
Posted by: KBK   2005-11-09 13:35  

#8  Ship's right - it's an interest rate play. I did a stat analysis wayyy back on the dollar / DM exchange rate; something like 60-65% of the change in that exchange rate was due to the changes in interest rates (can't remember if I used Fed / Bundesbank rates or T-notes and the German equivalent, but that's the gist of it).
Posted by: Raj   2005-11-09 11:42  

#7  Wow. It plummeted all the way from 1.1805 to 1.1760. That's about 0.3%. Big Furry Deal. It probably wiggles that much in normal day-to-day trading.

It's like the news reports that stocks "surged" by 100 points on some news or other.
Posted by: Jackal   2005-11-09 11:23  

#6  Buffet bet on the Current Accounts Defecit not the interest rate differential... a rare bad bet.
Posted by: Shipman   2005-11-09 11:20  

#5  Massive unemployement, no GDP growth and weeks of riots will do that to a currency.
See America for currency fix solutions.
Posted by: mmurray821   2005-11-09 09:56  

#4  Yup, the looney liberals' wizard lost about a $billion, lol.
Posted by: .com   2005-11-09 01:06  

#3  If only Soros was as lucky.
Posted by: Doolittle   2005-11-09 00:56  

#2  I posted this late on yesterday's thread but here again - YAHOO!!!!!!!!!!!

And if I were a stockholder, he's playing w/my money - not his:

Warren Buffett's Berkshire Hathaway reduced a bet against the US dollar after losing more than $US900 million ($1.23 billion) from foreign currency investments this year.

Mr Buffett, who has said the US trade deficit would weaken the US dollar, cut his foreign-currency forward contracts to $US16.5 billion in September from $US21.5 billion in June, Berkshire said in a statement. The US dollar in July reached a 13-month high against a basket of six major currencies.

"To his credit, he reduced his exposure before the recent run-up of the dollar cost him more," said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania.

Posted by: anonymous2u   2005-11-09 00:26  

#1  does the bad management ever stop?
Posted by: 2b   2005-11-09 00:19  

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