By Andrew L. Jaffee

Yes, I updated my last chart specifying the Iraqi dinar/U.S. dollar exchange rate, as the fledgling currency continues its tear, gaining value. When I last reported, the dinar was trading at 1465 to the dollar. Today, it is trading at 1449, gaining almost 2% in value since July. Again I ask: With all the bad news, why is the dinar going up? What are the currency markets telling us? We’re well past the dinar speculation craze of 2-3 years ago. Something meaningful is going on here. I can only speculate (not a pun, nor a currency transaction). Here are a few ideas:

• Iraqi Prime Minister Nouri al-Maliki is sacking the current oil minister, as Hussein al-Shahristani “lacks knowledge of the Iraqi oil sector.” Another job handed out based on patronage? Time for some real world experience.
• “Iraq’s Shi’a-led government ordered the arrest of the country’s most prominent Sunni cleric on Thursday on suspicion of terrorism, a move that could further raise sectarian tension amid a rash of kidnappings and killings.” Maybe it will ease tensions, and show that the current government means business.
• Japan announced its intention of buying Iraqi oil.
• The Shiite-dominated government has finally held its own members accountable for involvement in torture, and Saddam’s former #2 has ordered Baathist groups to cease terrorist attacks.