Foreign Exchange Daily Updates - Archive

Below is the foreign exchange market update (Feb 17/03).

Note: The weekly foreign exchange updates give you a foreign exchange expert trader's view of the volatile foreign exchange markets. It is a great source of insight into the complexities of foreign exchange and issues. It is a valuable source of information with respect to the factors that affect foreign exchange rates at the macro level.

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Weekly Foreign Exchange Report .... Feb 17/03

US Dollar benefits

On the geopolitical front, the agreement within NATO that it will protect Turkey, if there is war with Iraq, benefited the US$ as expected. France did not take part after they opposed the move.

There is no change on the economic news out of Europe. The German economy is continuing to contract and almost certainly will be declared in recession by the end of the 1st.Q.

With the US stock market closed for Presidents day the currencies remain very volatile, the daily fluctuations of between 1/2% and 2% continue so please call your foreign exchange market advisor for the latest analysis.

Our longer term view is unchanged.

The interest rate differential benefit for the Euro vs the US$ is eroding and with the European Central Bank expected to cut rates in March. The Euro could have seen its top, not withstanding geopolitical pressures.

Precious metals, the Swiss Franc, the Canadian, Australian and New Zealand Dollars all strengthen if war with Iraq is more likely and loose value if it seems less likely. As we have said any perception by the markets that there is "knowledge" of what might happen on the Iraqi situation and the US$ should benefit. BUT the suggestion of US/UK only action on Iraq will be US$ negative, and would also weaken the Mexican Peso.