Rhody Trader

Here’s one for all those who think Goldman Sachs rules the world.

Yesterday there was a BIG drop in the dollar out of thin air in the afternoon. You can see it on this Dollar Index 30 minute chart.

At the time no one knew what happened to cause that fall, which fed into higher commodity prices and a rise in the stock market to new day highs. EUR/USD shot up from 1.4280 to 1.4400 in that period.

According to one of my colleagues in London, the talk in the market has the move caused by a $3b sale of USD/CHF, with that sale being done by Goldman Sachs, potentially on behalf of Warren Buffett, who of course is a big owner of GS. The rumor is that Buffett is buying a big stake in Swiss banking giant UBS.

What’s interesting is that today the Swiss released some much better than expected economic data. The KoF Leading Indicator surged to -0.04 in August. The forecast was for -0.60. This comes along with an upwardly revised -0.85 previous reading (from -0.99) . It was the strongest rise on record.

Can’t help but wondering where USD/CHF (which fell to 1.0560 from 1.0660)  would have been after the data had we not had the big sale yesterday. If it was indeed Buffett buying CHF yesterday he might have saved himself a couple percent doing so ahead of this morning’s data.

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