Dollar Sinks as China Bails
Plenty of developments around the markets today. Crude Oil inventories dropped by a lower-than-expected 800,000 barrels, meaning this wouldn't be the day for the flag to be planted atop the $100 peak. U.S. stock markets plunged on continued bad news related to the credit crunch.
But the continuing story to focus on is the U.S. Dollar, which managed to hit another all-time low today as China proclaimed its lack of confidence in the currency. With the large amount of money that China has tied up in the Dollar, the country's decision to back off is a factor that cannot be ignored – and the market certainly paid attention. China plans to shift up to 1.43 trillion of currency reserves out of the Dollar and into stronger currencies.
On this news, investors started shifting money into Gold. Though prices for the day finished basically flat, at one point the December Comex contract was as high as 848. Tomorrow, traders will be watching the initial claims numbers to see how the employment picture is stacking up this week.
Mike Tosaw, Director of Education
