Dollar Surge Continues After NFP
The Dollar surge continues this morning during early New York market hours with USD/Yen trading at 117.49 as I write and Euro setting back to 140.88.
I don’t expect for the strength in the Dollar to last very long. Most of the 89,000 upward jobs revision to the August NFP report was from 58,000 government jobs that the Department of Labor somehow over looked in the weak August report. The August report, which was released on September 18th, was used by the Fed , at least in part, to justify the 50 basis point Bernanke rate cut.
With a heavy round of ARM resets due in October, and with about 2,500,000 adjustable rate mortgage resets due between now and mid 2008, the housing market is likely to continue to place pressure on the overall economy. In fact, the worse by far is likely yet to come.
It seems prudent to me to sell US Dollars on rallies.
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