When the dollar moved, it was usually because some other central banker or politician somewhere had made a statement. (The markets would be far more peaceful if politicians kept their views on the future path of the dollar to themselves. In view of the high percentage of times they end up apologizing for, or modifying, their remarks, it is a wonder they don’t stifle themselves.)
But there was no such news.
I told Alexander [a client] that several Arabs had sold massive holdings of gold, for which they received dollars.
They were selling those dollars for marks and thereby driving the dollar lower.
I spent much of my working life inventing logical lies like this.
Most of the time when markets move, no one has any idea why.
A man who can tell a good story can make a good living as a broker. It was the job of people like me to make up reasons, to spin a plausible yarn.
And it’s amazing what people will believe. Heavy selling out of the Middle East was an old standby.
Since no one ever had any clue what the Arabs were doing with their money or why, no story involving Arabs could ever be refuted.