Macroeconomics
As far the currency markets were concerned our forecasts were quite accurate. The US$ extended its gains against the euro and the trend only lost a small amount of its momentum when the ECB announced on Friday that an increase in interest rates is not far away in an attempt to keep inflation in the euro zone under control. The US$ reacted sharply and lost about 1% of its value on Friday afternoon. After America's merchandise trade deficit came in at 71.1 billion for September, it appears that the fundamental problems in the American economy might come to the foreground again after the market has neglected them for some time. In recent weeks, many banks and experts have leaned towards a weaker outlook for the greenback. Although we are not overly impressed by the opinions of experts, there are good reasons to look carefully into the currency market again and at least to consider the possibility that the trend of the US dollar could go into reverse.
