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September 12, 2005

USD strengthens as Fed rate hike expectations grow, Mon., Sept. 12, 2005, 11:15 AM

What a difference a few days makes. The Fed policy of measured tightening is now widely expected to continue. Consequently the USD is stronger. All but Copper is lower on my 18-item Commodities monitor. Even Gold is down "1.10.


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But, I'm not surprised. I indicated last week this was the most likely scenario.

Now, the Commodity price bulls like me will be looking at tomorrow's Producer Price Index (PPI) report, followed by the Consumer CPI data on (I believe) Thursday, The trends in that data indicate that inflation is strengthening.

Longer-term I think it's wise to bet against the govt's words on inflation and its vision that the South can be reborn without taking on hundreds of billions in new debt.

Note that the charts here are 24-hour GMT, which is ET +5.

Posted by Posted by Bill Cara on September 12, 2005 11:17:59 AM | Category: Commodities , Forex