The Greenback Wallops the Euro
The Chinese chose 8-8-08 as an auspicious day tor the opening of the Beijing Olympics and it was a good day for the U.S. dollar as well. An index that tracks the greenback against the currencies of six countries that are U.S. trading partners climbed 1.6% at 75.72 on Friday, August 8, 2008, reaching a five-month high. That’s a total gain of more than 3% since the recent low on July 15.
This resulted in a sharp slide in energy and other commodity prices, and triggered a rally on Wall Street with the S&P 500 up 2.4%, the Nasdaq 2.5% and the Dow 2.6%. Foreign stocks are not the hedge many had hoped for, and Chinese stocks have been especially disappointing lately. One U.S. sector that seems to be outperforming the market right now is biotech.
The U.S. economy is still not exactly thriving, but it is not in negative territory either. Exports are strong and consumer spending is still positive, offsetting the difficulties in the housing sector and in the credit markets. The U.S. grew at a 1.9% annual rate last quarter.