Euro Bolts Past $1.35 on U.S. GDP News
I certainly hope that people who are short the Euro would get it through their skulls that it doesn’t matter what the U.S. financial press (or Zerohedge for that matter) says about the Euro-zone. When you compare the situation with the Euro versus the situation with the U.S. Dollar the Dollar is the far uglier chick at the dance. As bad as the Euro is — and its fundamentals are horrific — the fact is that it does not have the burden of being both the world’s reserve currency AND the primary settlement currency for the single biggest market in the world –crude oil.
So, as things deteriorate in the U.S. — say like a negative GDP growth print — and the politicians endlessly squabble about who is going to take the blame for the economy coming apart at the seems — the Republicans — the Euro-zone will get some of that falling Dollar safe-haven demand because at this point in time ECB President Mario Draghi is reloading his gun while Ben Bernanke just opened his up on full-auto.
On the GDP news this morning the EUR/USD blasted right through what was supposed to be strong resistance at $1.35 and pushed up to $1.356. This took Gold, Silver, Copper and Crude oil with it as traders rightly surmised that the Fed would add another machine gun to that Huey and spray out dollars by they billions. The only things we’re missing at this point is the crazy guy from Full Metal Jacket screaming “Get Some! Get Some!”