US Dollar Update

I posited here that the Euro is in a tough spot and headed down, to $1.15, maybe even $1.10. The economic and market fundamentals just seem to be arrayed against it. Greenspan has been telling us that the economy is robust, hurricanes and all, and to expect better rates on lendable money. Now he is getting help from all manner of news events that are pounding away at the animal spirits. France looks like it is in some deep yogurt with some disaffected folks who have managed to keep a serious mayhem machine up and running on 8 days now. People debate whether this is a Muslim blowup, a "third Intifada", or just about jobs, more specifically the lack of jobs. From the market's point of view, does it really matter? Either way, it's bad mojo as it highlights the state of the economy and the political risks in a Euro bulwark country. Germany did it's part last month with a whimper of an election, now it is France. So, today the Euro seems to have broken through some downside resistance and is at $1.1820 as I type. I suspect traders don't want to be in Euros over the weekend with the prospect of the 50% of Clichy and Aulnay residents who do have jobs joining in over the weekend.

The Euro can't afford alot more bad news. Hold on to those greenbacks, Mr. Buffett.

UPDATE: Warren Buffett has reduced his bearish bet on the dollar (scroll) after losing $900 million on a faulty analysis of the trade deficit's effect on the dollar. Brilliance in stock picking does not port over to currencies and commidities very well. Julian Robertson proved that. Now, so has Warren. Let's be honest though, I wish I was in a position to vaporize $900 million and not sweat it.