The dollar continues to drop like a rock, while total foreign holdings of U.S. treasuries continue to inch up.

Foreign investment is a great contary indicator, no?

Marc Chandler submits:The balance of forces continues to weigh on the US dollar. Earlier this year news form Europe was read as the glass was half empty. Now it is being understood as half full. At the same time, the earlier momentum of the US economy has stalled.Leave aside the fact that Greece dropped plans to offer 1-year bills yesterday, the success of the 6-month bill sale, at a rate lower than the EU/IMF offer in their lending facility is remarkable. Even the downgrade of Portugal was taken in stride and today the country managed to raise a little more money in its bonds sales than it initially intended. In addition, The ECB continued to drain liquidity, helping to validate the backing up of money market rates. Yesterday’s 200 bln drain seems to have largely funds from overnight deposits, which fell to less than 53 bln euro.

Symmetry Capital Mgmt submits: We continue to be confident in our half time "muddle through" call, despite powerful cross-currents. Here's our latest inventory of the good, bad, and ugly: THE GOODComplete Story »

Myanmar NewsEstonia Aims to Boost Voter Support for Euro as Accession Nears

Andrew Wilkinson submits: Bonds are mixed today with European fixed income prices falling as investors appear to be less willing to buy into government auctions without the lure of higher yields. Meanwhile U.S. markets are responding to a mixed retail sales report just as investors attempt to reconcile signs of weakness with the best quarterly performance by technology bellwether indicator Intel Corp. Complete Story »

WORLD FOREX: Dollar Slips After Disappointing US Retail Sales; FOMC EyedWall Street JournalThe dollar hit an intraday low against the yen in the wake of the figures, slipping more than 0.3% against the Japanese currency. ...

Gaza merchants cope with latest currency crisisMa'an News AgencyGaza - Ma'an - Palestinian Authority civil servants in the Gaza Strip received only partial salaries in June, owing to a renewed currency crisis in the ...

Andrew Wilkinson submits: Several global equity indices moved to fresh two-year highs on Wednesday as investors were reminded of the positive growth picture from emerging markets at least. The Singapore government was forced to lift this year’s growth prediction to 15% following a staggering 26% quarterly GDP surge announced today. Despite several attempts at dousing the flames of bull markets for stocks in the second quarter, it was a glowing earnings report at Intel that fanned the smoldering embers overnight as the bellwether for corporate demand reported a record quarter. Risk on remains the theme and the sharp moves are there to prove how wrong-footed investors have become. Complete Story »

Richard Suttmeier submits: For US Treasury yields, it's two auctions down, one to go. Gold needs a close above my semiannual pivot at $1218.7 to begin a trend to challenge the June all time high or $1266.5. Crude oil has returned to my annual pivot at $77.05, as the trading range remains $67 per barrel to $87 per barrel in round numbers. The euro is trading just above my monthly pivot at 1.2670. On Tuesday the Dow returned to my annual pivot at 10,379 as expected. The Congressional Oversight Panel agrees with my assessment with regard to TARP and community banks. What to do with Intel this morning? 10-Year Note (3.114) – The 10-Year note auction came in at 3.119. The bid to cover ratio was 3.09 times the auction size and Indirect Bids were at 42% of the auction size.

The LFB submits:Forex markets have absorbed a very quiet session of trade ahead of U.S. Retail Sales numbers and FOMC minutes that will reveal the inner thought process from the latest Fed interest rate meeting. Most pairs are back to their opening prices with hardly any able to move more than 20-30 pips. The overall short-Usd bias is in play; however, that could change quickly if earnings season reports, red-flag economics, or equity volume picks up.Four-Hour chart momentum reads are mainly neutral and indicate that near-term targets should be favored at least until the highs or lows of the previous session are tested and then broken. Complete Story »

Philippines NewsEstonia gets official OK on euro for 2011Baltic Times

The rally rolls on. We closed yesterday just below 1100 on the S&P. The futures are up strong after the close as the bulls continue to get emboldened by their recent winning streak. I am not surprised we got back up here. I had said a few days ago that the market becomes an interesting short at the 1100 area. However, I did not think we would get here so quickly so this rally may have some more legs as we head into OpEx.Complete Story »

Asian Currencies Gain on Record Singapore Growth, Intel SalesBusinessWeek“The Monetary Authority of Singapore may at the very least maintain a modest and gradual appreciation stance for the currency at the next policy meeting,” ...

Dumping the dollar: Why it's time to diversifyCNNMoneyThe US dollar has long been the global currency of choice. As much as 64% of the world's currency reserves are held in greenbacks, according to the IMF. ...

Stock Briefings (blog)

Copper steady; eyes equity and currency marketsReuters AfricaTraders said metals have been stuck in a range since June and had been taking their cue from equity and currency markets in the absence of a strong ...

Irish TimesEuro currency exchange rate suffering

Stuff.co.nz

Reuters IndiaAnalysis: Big money tiptoes back to EuropeReuters

The Pragmatic Capitalist submits: Regular readers have often heard me compare the euro to the gold standard. In effect, the euro as a single currency system is restrictive in exactly the same ways that the gold standard was restrictive. I have referred to this as the “inefficient market irony behind the euro crisis“. I haven’t seen the comparison made too often elsewhere until reading the Financial Times the other day. Edward Chancellor of GMO beautifully describes the restrictions of single currency systems and why they ultimately fail: