Wink, Wink, Nod, Nod

With benign neglect with the continued depreciation of the US$ the unofficial policy of US officials, it’s been left to our trading partners to verbally jawbone a reversal. Ahead of the G7 meeting this weekend, Trichet said “excess volatility” in the FX market may have “adverse implications.” This is code for “I don’t like the Euro going straight up” and “the debasement of the reserve currency of the world is probably not healthy for global economic balance.” The $ is rising to a 3 week high vs the Euro in response. Also hurting the Euro was an unexpected drop in Aug German retail sales. The Yen is lower too after Japan’s Tankan report showed a drop in cap ex plans but the headline figure was in line with forecasts and the outlook was better than expected. China’s state focused PMI manufacturing number rose to the highest since Apr ’08 but was slightly less than expected. A lot of US economic data come our way today.

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