Euro continues to stagnate

Even with all the chatter about the possibility that the Federal Reserve will cut its target rate by half a point at the end of the month, which would in theory put downwards pressure on the dollar, the euro hardly responded, with the March futures closing on Friday at $1.4780, up only very slightly from $1.4777 last week.

Far from being bullish on the euro, futures all the way out at June 2009 are priced only at $1.4586, which indicates the dollar gaining strength.

Although foreign exchange "strategists" do a lot of talking about "fundamentals" and how weak the dollar is, the truth is that it is all a giant shell game with speculation and short-term trading as its aim and nothing to do with long-term fundamentals.

Despite the "weakness" of the dollar, the euro, pound, and Canadian dollar have not made any headway against the dollar for two months now.

-- Jack Krupansky