The Dollar gets ambushed overnight

• The long run of Dollar rallies ends overnight

• The will they cut rates or not will become a broken record.

Good Day... And a Marvelous Monday to you! Well, the Midwest got hit by a winter storm this past weekend, and winter came to S. Florida... The contrast on temperatures, etc. I won't get into, because my friends don't like it when I do! The NFL playoff teams are set, so let the playoffs begin! And the final four college teams are in the Semifinals... OSU, PS, TU, and ND... Should be some good games! It was a great Friday night in St. louis, as the SLU Billikens won, and the Blues won! Gary Wright greets me this morning with his song: Love Is Alive...

I saw Gary Wright open up for Peter Frampton back in the day, and Gary only had keyboard players on stage.... Very Interesting.... 

Well, Friday, last week was just another day for the dollar to gain more ground.... This is really getting out of hand, and the dollar is so overbought right now, that something has to give at some time! The BBDXY gained 2 index points on Friday. The euro has fallen to a 102 handle, and it hasn't been that weak since it was on its way up from 98 when it was first introduced.... Yes, I was trading currencies back then.... In fact, in 1998, I attended a currency conference in London, and the moderator asked, "Let's see a show of hands of who doesn't believe the euro will survive?" And I immediately raised my hand... At that point, there were just too many questions about the euro that I really didn't think it would work.... 

I soon found out that I was wrong about that, and the euro quickly became the 2nd highest volume currency traded in the world, and the offset currency to the dollar.... 

OK, enough history today.... Gold was sold on Friday, after gaining $32 on Thursday, it lost $17.80 on Friday... And Silver, after gaining 65-cents on Thursday, was able to hang on to 7-cents of gain on Friday... Gold ended the week at $2,640, and Silver at $29.68... On Kitco.com yesterday, they had an article of which I pulled this quote; "After gaining nearly 30% in 2024 – outperforming every commodity and all but a handful of assets – gold prices are still inspiring confidence among many industry experts, while most retail traders see the yellow metal breaking above $3,000 per ounce in 2025."

So, how many gyrations will we have to live with to get to $3,000? The short paper traders will still be knocking at the door, and the dollar is supposedly going to remain strong throughout 2025.( that I have a problem believing, but so be it)... So, IF we get to $3,000 it will be a tug-of-war, and I'll lose more hair trying to make sense of it all... 

The price of Oil bumped higher on Friday and ended the week trading with a $73 handle... And the 10-year Treasury Bond saw its yield rise to 4.60% to end the week.... The Oil price is finally reacting to the tinder box of the Middle East, it took them awhile to get going, and sometimes I wondered if they really realized what was going on over there.

In the overnight markets last night.... Well, the dollar selloff that I anticipated began.... But is it here to stay? Or, is this just a knee-jerk reaction to the report that came out last night regarding the Trump Tariffs? Here's Bloomberg.com with the skinny: "The dollar fell by the most since November 2023 after the Washington Post reported that aides to Donald Trump are considering narrowing the scope of his tariff plan. Stocks advanced, fueled by tech gains."

Chuck again... The BDDXY has lost 11 index points overnight, and the euro has gained 2 full cents to 1.04 handle this morning... This is wild and crazy folks... One minute the dollar is kicking tail and taking names later, and then it's not! I'm not kidding here . This is a one-time fall in the BBDXY that I don't recall seeing before. Now, if this selling can see some follow through, then we might be getting to the scenario for the dollar that I've imagined before... 

Gold is not reacting to this dollar selloff that I would think, but the day is young.... Gold is up $3 to start the day/ week.... Silver is getting bought by the fistful... Silver is up 25-cents to start the day/ week today... This is not a typical start to the year that we've seen lately, where the dollar gets bought to start the year, all the forecasters come out and say, "This is the dollar's year", only to see the dollar turn around and get sold the rest of the year.... So to speak.... 

The price of oil bumped higher again overnight to trade this morning with a $74 handle... And the 10-year Treasury bond's yield is 4.60% to start the day / week this morning.... 

One of the currencies that has historically fought off Dollar strength, the Chinese renminbi, has really plunged with most of the plunging coming at year's end.... The renminbi is 7.32 to the dollar.... Just last September, the renminbi was 7.01 to the dollar.... And I recall the renminbi trading at 6.30 to the dollar a couple of years ago.... But that was before the world began to unravel....   And I'm sure the Chinese leaders don't mind if their currency is weak, as it helps offset the effects of the tariffs on their exports to the U.S. But at 7.32? That's quite weak, and I suspect the Chinese to do something about that much weakness soon.... Watch for news about a Stimulus, or something to hep the currency ro gain just a tad...

I read on Bloomberg.com this past weekend that Hedge Funds are eyeing a dollar/ euro parity level.... Really.... These guys really give me a rash... They get wild hair about something, and they go hog-heaven on it.... Well, I hope they get the slop from these ideas.... 

Now, that's not nice, Chuck.... OK, I'm sorry.... But they do give me a rash!  

OK, longtime reader, Bob, sent me a link to a blog written by Bill Totten, who has been doing this for a long time too, and it his blog he had this: "China has tightened its export bans on materials with military applications. Its customs office is approving sales only to well-known end users, and for non-military use only.

China also has successfully closed off access to its markets by brokers and resellers. These hubs in Hong Kong, Tokyo, New York, and London report being unable to procure any metals in 2024."

Chuck again... Well, this will only be good for metals prices.... Because the of the lack of supply... And the U.S. can't decide to ramp up production, because that would take years to come to fruition....  

Well, we've got more than 3 weeks of hammering and talk about whether the Fed Heads are going to cut rates at their first FOMC meeting 1/29....  If you can believe one of the Fed Heads who had this to say last week: "Fed's Barkin: We must see inflation at 2% or weakening in demand to cut rates." Hmmm.... I wonder where this guy was when the first rate cut came through back in September, because inflation certainly wasn't anywhere close to 2% at that time? So, we're going to hear a lot of back and forth from the Fed Heads, and economists, and analysts, on whether or not there will be a rate cut this month.... Doesn't make a hill of beans to me... The dollar is on a roll right now and if they did cut rates, and debase the currency even more, it wouldn't hurt the dollar, so, fundamentals are out the window right now.... 

The U.S. Data Cupboard this week has a couple of real economic reports for us to see, like today's Nov. Factory Orders print.... I suspect that this report will print negative once again.... Last week, I had jumped the gun with my telling you that the Jobs Jamboree was last Friday.... That was obviously incorrect, sorry, and the Jobs Jamboree will be this Friday.... And the so-called experts have forecast that just 155,000 jobs were created in December.... Well, I'm sure the BLS won't have any of that, and has arms full of jobs created out of thin air to add to the surveys.... I'm just saying.... 

To recap... Friday was another day and therefore another day for the dollar to rally.... Chuck mentions that the Hedge Fund guys are eyeing the euro at parity with the dollar.... UGH! Gold gained on Thursday and lost on Friday... C'mon gold traders pick a lane! The Chinese are playing with their currency and allowing it to weaken to offset the effects of the tariffs on their exports to the U.S. , but Chuck thinks the weakening has gone too far.... And will the Fed Heads cut rates 1/29 or not? Only the Shadow Knows.... And in the overnight markets the dollar got ambushed by 11 index points in the BBDXY.... 

For What It's Worth.... I have been accused of being a gloom and doom guy in the past... And yes, while I do walk in those circles, I don't believe that all this mess will cause an end to the world... But a new beginning after it all collapses... 

Here's your snippet: "Periodically, I’ll encounter someone who has read one of my essays and has decided not to pursue them further, stating, “You’re one of those ‘End of the world’ guys. I can’t be bothered reading the writings of someone who thinks we’re all doomed. I have a more positive outlook than that.”

In actual fact, I agree entirely with his latter two comments. I can’t be bothered reading the thoughts of a writer who says we’re all doomed, either. I, too, have a more positive outlook than that.

My one discrepancy with such comments is that I don’t by any means think that the present state of events will lead to the end of the world, as he assumes.

But then, neither am I naïve enough to think that if I just hope for the best, the powers that be will cease to be parasitical and predatory out of sympathy for me. They will not.

For any serious student of history, one of the great realizations that occurs at some point is that governments are inherently controlling by nature. The more control they have, the more they desire and the more they pursue. After all, governments actually produce nothing. They exist solely upon what they can extract from the people they rule over. Therefore, their personal success is not measured by how well they serve their people, it’s measured by how much they can extract from the people.

And so, it’s a given that all governments will pursue ever-greater levels of power over their minions up to and including the point of total dominance.

It should be said that, on rare occasions, a people will rise up and create a governmental system in which the rights of the individual are paramount. This was true in the creation of the Athenian Republic and the American Constitution, and even the British Magna Carta."

Chuck again... This is a long article, so you'll have to go to the link to read it all.... 

Market Prices 1/6/2025: American Style: A$ .6294, kiwi .5678, C$ .6998, euro 1.0419, sterling 1.2634, Swiss $1.1084, European Style: rand 18.4734, krone 11.2634, SEK 11.1084, forint 398.10, zloty 4.0786, koruna 24.19432, RUB 108.00, yen 156.57, sing 1.3587, HKD 7.7736, INR 85.82, China 7.3122, peso 20.27, BRL 6.1062, BBDXY 1,300, Dollar Index 109.13, Oil $74.29, 10-year 4.60%, Silver $29.93, Platinum $940.00, Palladium $933.00, Copper $4.18, and Gold.... $2,627.78.

That's it for today.... Winter has come to S. Florida.... I'm not complaining, because it's still nice outside, just a bit cooler than usual... And it'll be over in a week.... We had dinner last night with good friends, Jack, Loraine and Gus. Gus's granddaughter and friend also joined us.... I love when friends get together for food, drink and conversation. I usually don't say much during dinner, preferring to listen to everyone else's conversations... I know that's difficult to imagine, me not saying much, but it's tru, it's tru, I did see a putty tat! HA! The Mizzou Tigers didn't start their conference schedule on the right foot, losing to Auburn.... UGH! And our Blues lost on Saturday.... So, Friday was good, Saturday not good.... Well, I've got to get outside and soak in some Vitamin D, The Great Al Stewart takes us to the finish line today with his song: Year Of The Cat.... I hope you have a Marvelous Monday today, and please Be Good To Yourself!