Dollar Strength?

by Larry Levin


The US dollar was stronger today, especially against the Euro. The rallying US dollar is putting downward pressure on oil and gold, among other commodities. The rationale for dollar strength is that the Fed may be done cutting rates for this very reason: to put out the fire in the oil patch. And if the Fed cuts again, it will probably signal "one and done."

"A more significant force behind the movement in the dollar was the looming potential of a narrowing in gap between the monetary policy stance of the Fed and the ECB," wrote David Watt, senior currency strategist at RBC Capital Markets.

Commerce Department data showed U.S. home builders slashed their prices by a record amount, but sales still plummeted by 8.5% to a 17-year low in March. The decline in new-home sales to a seasonally adjusted annual rate of 526,000 was much weaker than the 577,000 pace expected by many economists.

"The housing crisis continues, with sales of single-family homes sliding for five straight months, at a quickening pace, and nearly as fast as starts. The massive overhang of homes on the market will keep prices on a downward slope, raising the downside risks for both the economy and financial markets." wrote Sal Guatieri, economist at BMO Capital Markets.

Durable goods orders fell 0.3% in March, the third decline in a row.

On a brighter note, however, first time filings for state unemployment benefits fell in the latest week. For the week ended April 19, initial claims fell 33,000 to 342,000. This is the lowest level since the week ended February 16. Claims have been above that level for the past five weeks, but have also been very volatile, most likely due to trouble adjusting for the early Easter holiday this year. So it is hard to draw firm conclusions.

Real Time Trading Signals*for

Trade Date: 4/24/08

E-Mini S&P Trades*
(before fees and commissions):


1) PP buy @ 8:40am at 1380.00 = +1.00 & -1.75

2) OTF sell @ 9:50am at 1375.00 = -2.00 (1 lot)

3) PP sell @ 10:20pm at 1380.50 = -1.75 (1 lot)

4) OTF buy @ 12:25pm at 1391.00 = +.75 & b/e

5) Algorithm trades (7)...combined total...+12.75

E-Mini Russell Trades*
(before fees and commissions):

1) Buy @ 9:23am at 700.4 = +.5 (1 lot)

2) Buy @ 10:56am at 712.7 = +2.0 & +3.1

3) Buy @ 11:11am at 714.5 = +.5 & +1.3

4) Buy @ 11:17am at 714.6 = +1.0 & +3.1

5) Buy @ 11:44am at 716.4 = -.6 (1 lot) ...+$1,090


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