Currencies Will Brush Off Sandy: Pro
This pro says don't expect Sandy to buffet currencies the way it has the northeast.
Hurricane Katrina was followed by a selloff in the euro against the dollar. Could Sandy bring a repeat?
Not likely, says Richard Yetsenga, head of global markets research, ANZ. "This storm obviously is a terrible human event," he told CNBC, "but it's not a broader market issue."
Instead, Yetsenga says, "the pulse of the global data" and the outcome of the U.S. election will have a greater impact on the forex markets.
There is an underlying issue as well, Yetsenga says: China's changing approach to managing its currency. He says the yuan's recent strength marks a real shift, rather than a passing fluctuation, and adds that officials there seem to think the currency "is somewhere close to the fair value, which is close to our numbers, and they're willing the take the market's leadership."
Yetsenga also argues that traders seem to have an outmoded idea of the dollar's import in forex.
"One of the most dangerous ideas in markets is that when the U.S. economy recovers, the dollar will go up. Well, really"? Are you going to buy dollar-China or sell the Australian dollar because the U.S. economy is recovering? I don't think so."
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