CSFB is calling for a near term price decline in the price of oil of 9%.
The trade gap came in at $61 billion for February.
The trade gap numbers put downward pressure on the dollar. If the dollar drops 4% or 5% against major currencies (back to where it was a few weeks ago) it would invalidate CSFB's oil call. Oil is priced in dollars. If the dollar falls, oil has to go up to keep everything equal. If the dollar falls 4% that might mean would drop a lot less than 9% everything else equal in CSFB's call.
I don't know what oil will do but there is a clear and obvious reason for CSFB to be wrong due to external factors. Tricky stuff sometimes.
On a personal note we fought a small fire last night just down the road. It some how started underground where the power line was anchored in. It was tiny but still took two hours to completely put out.
Wikinvest Wire
2 comments:
Actually, the dollar rallied today. 'Buy the rumor, sell the fact'. The currency market is wating the Fed now. I put something up on my website about it.
it turned and ithink you are right as to why.
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