If one just looks at the Major Currency pairs and sees the Dollar a bit weaker this morning, it is very easy to overlook at what has been happening in some of the Emerging Market currencies. It goes back to that same interest rate differential and the fact that there is concern about slowing global growth, especially in some of these emerging markets. I should also note that there has been a large carry trade involved here as well.
I want to post a chart of the Brazilian Real for the benefit of grain traders and hog traders.
Please note that the currency just made a 6 year low against the US Dollar. Brazilian grain and Brazilian pork are dirt cheap on the global markets compared to US grains and US pork. Most US based grain traders have been in the past, and remain oblivious to such things.
Also, while not an emerging market, the Australian Dollar just matched its yearly low against the greenback. If it moves lower from here, we are talking about 4 year lows. Aussie beef is getting cheaper! It is only a matter of time before high-priced US Beef is going to price itself out of export demand.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
Trader Dan's free work will soon be available at www.traderdan.biz