8/13/09

Make no mistake about it

News. The euro gained traction Wednesday after the U.S. Federal Reserve held a key bank lending rate at a record low near zero, and the U.S. Commerce Department said that the U.S. trade deficit edged up slightly in June.

It was bolstered further Thursday after Germany reported that when adjusted for price, seasonal and calendar variations, gross domestic product rose 0.3 percent over the previous quarter, the first rise since the first quarter of 2008, when the country entered recession.

My point. Make no mistake about it. A currency reflects the strength of a country. That we like it or not. The Euro is strong because the economies of the Euro-area are stronger. The dollar will strenghten when our economy is attractive and the policies of Washington make sense. Only then will investors buy dollars to invest in the USA and the dollar will appreciate.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

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