US stocks surge on ‘watershed’ dollar jump

Peter Garnham and John Authers
Financial Times
Saturday, Aug 9, 2008

US stocks soared on Friday as the dollar saw its biggest one-day jump against the euro in eight years and oil prices plunged.

The moves marked a key reversal of a trend that many investors had followed profitably for months – betting that high commodity prices would keep the dollar weak.

The dollar reached its highest in five months against a trade-weighted basket of currencies, while oil fell more than $5 to $114.87, 22 per cent below its record high of $147.27 last month. The S&P 500 closed 2.4 per cent higher in New York.

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The shift in sentiment was triggered by Jean-Claude Trichet, president of the European Central Bank, who warned on Thursday that third-quarter eurozone growth would be “particularly weak”. This sparked talk that the ECB would be forced to abandon its hawkish policy stance and start cutting interest rates, thereby weakening the euro.

“This is the watershed week for the US dollar,” said Marc Chandler, currency strategist at Brown Brothers Harriman. “The magnitude of the dollar’s moves and the breaking of key technical levels suggest that a major shift in the outlook towards the dollar is occurring as massive positions are adjusted.” Other analysts described the widespread buying of dollars as “capitulation”.

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4 Responses to “US stocks surge on ‘watershed’ dollar jump”

1. Mike Knows Says:
   August 9th, 2008 at 10:02 pm

   Excuse me????
   BIG TIME MANIPULATION IS GOING ON BY CENTRAL BANKERS!

   Dollar’s don’t rise when an economy is tanking!

   GET READY FOR THE DOUBLE WHAMMY!

   They are going to crash the price of oil to 50 bucks and sink the American economy. Watch as the Dollar crashes to 5 cents and nobody will have a job.
   Then they will draft you and send you to die in a fake war they started with lies.
   They are going to try to kill as many people as they can before our second sun in our binary star system appears. They need to get rid of 6 billion of us before 2012 so that 500 million can have food to survive a huge global disaster that is coming by a brown dwarf star and 7 planets that are heading our way.
   The whole planet will burn and all the oceans will evaporate when it passes 2 times, once incoming and again outgoing after it goes around the sun. After it is gone it will rain for months and everyone left that didn’t burn will drown. The earth is going to tilt 20 degrees in one shot and this will put salt all over the earth and nothing will grow for 4 years.
   We are all doomed. OUR governments will kill us all to save themselves.
   This is the absolute truth, it is coming from between Orion and Sirius and it is the area of the sky that has been blocked from view on Google Sky map. YOU HAVE BEEN WARNED!

2. Gary S Says:
   August 10th, 2008 at 6:48 am

   Well Mike, I think whatever it is you’re smoking, it needs to stop. You sound like a madman in an asylum. You started off perfectly fine, then you went off the deep end speaking of colliding star systems… as if they’re within a few miles of each other.

   This all sounds like a pep talk encouraging people to keep charging those credit cards to the max and buy a bigger house. I doubt the rest of the world wishes to keep financing our high life.

3. Chris Says:
   August 10th, 2008 at 7:17 pm

   No…..actually, Mike is pretty much dead-on correct! And it really sucks.

4. Indian in the machine Says:
   August 10th, 2008 at 7:56 pm

   CENTRAL BANK MANIPULATION, DO NOT FALL FOR THIS TRICK, THE DOLLAR IS WORTHLESS, EVERYBODY KNOWS! THE WORLD KNOWS, THE OFF-WORLDERS KNOW…..THE UNIVERSE KNOWS….THE JOKE IS JUST ABOUT OVER, THE BEST IS YET TO COME, STAY POSITIVE FOLKS AND BE HEARTFELT.

   Indian in the machine
   Canada indian telling the Truth….
   http://www.indianinthemachine.com/index2.html
   http://www.youtube.com/indianinthemachine