Euro Soars to Record High
Those of you who have read my CAPS blog (both of you ;)) know that I have been and continue to be bearish on the U.S. dollar. The decline of the U.S. dollar continued this morning. The Euro soared to a new record high of $1.5057 this morning. The British Pound continues to climb versus the dollar as well, it is approaching $2 again.
Bernanke is scheduled to speak in Washington today. It will be interesting to see if he hints at the Fed leaning towards the Fed making additional rate cuts. Donald Kohn, who seems to be the only other Fed speaker besides Bernanke that one should pay attention to when they speak, seemed to hint yesterday that more cuts are coming. Any additional rate cuts would likely add to the dollar's weakness. I hope they do cut rates, it would likely add some serious juice to my portfolio's results. I have substantial positions in foreign companies and U.S. companies that export goods. Both would benefit from a fall in the dollar. I also am very long oil and natural gas, both of which are priced in dollars. Lastly, I used the recent downturn in the markets to load up on companies that pay massive (and which I believe are safe) dividends. The lower interest rates are, the more attractive these dividend payments become. A cut in the federal funds rate is not necessary for the companies that I have invested in to perform well, it would be pretty risky place all of one's bets on a move like that, but it would likely add some rocket fuel to my returns.
It's a good thing that I'm not planning on heading to Europe any time soon. I was going to leave the country for a cruise that I had booked in a couple of months, but I was only going to the Bahamas. Well, I have good news and bad news about that trip. The bad news is that I had to cancel my much needed vacation. The good news is the reason, my wife is expecting our second child. It's still fairly early, but I figure that it has already leaked out to almost everyone in my life so why not share it here :).
Soon to be long diapers...again