Rhody Trader
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That's part of it. Thoughts that Eurozone rates are maybe less likely to rise too helps. Commodities have been falling, which helps (though is also linked in). It's been a crowded trade for a long time. Inevitably some folks are going to start closing out their positions when the causes for the USD decline aren't so stark anymore.
However, any dollar strength will be undermined if inflation continues to increase. From an international perspective, the US still looks a dodgy bet. Of course, higher inflation also threatens Europe, and as indicated by Trichet last week, the ECB is most certainly not considering imminent rate cuts.
Indeed, the hammering the Euro has been taking of late has in effect acted as a proxy rate cut. And if the dollar continues to strenghten against the Euro , the need for ECB cuts diminishes further. Moreover, being a net exporter the EU will benefit from a strong dollar, which will also reduce its trade deficit. Therefore, constant ECB rates are more likely, and a more attractive proposition for international investors (they can hedge their Euro risk).
One could also expect the emerging/developing economies of new members to gradually feed through (during the next 5 years?).
Grant.
Grant.
Indeed, the hammering the Euro has been taking of late has in effect acted as a proxy rate cut. And if the dollar continues to strenghten against the Euro , the need for ECB cuts diminishes further. Moreover, being a net exporter the EU will benefit from a strong dollar, which will also reduce its trade deficit. Therefore, constant ECB rates are more likely, and a more attractive proposition for international investors (they can hedge their Euro risk).
One could also expect the emerging/developing economies of new members to gradually feed through (during the next 5 years?).
Grant.
Grant.
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As a net exporter they gain nothing with a strong currency, simply things remain because in the counterpart it is expected that the us cooling economy, or with an increasing recession risk, could affect their economic counterparts an at least in the same effect they´re having.
Take as an example the fact that England has a bad quality mortgage problem as the statesdo, simply they have had less publicity over the problem.
I understand the dollar strength has another explanation, which basically regards on short therm movements and the fact that despite the high oil prices they transform it in products even more expensive.
Take as an example the fact that England has a bad quality mortgage problem as the statesdo, simply they have had less publicity over the problem.
I understand the dollar strength has another explanation, which basically regards on short therm movements and the fact that despite the high oil prices they transform it in products even more expensive.
USDJPY moved away from the near term bottom set on mid of March; DOW moved away from upward skewed W-shape bottom set on mid of March; EURUSD unable to go beyond the near term psychological high of 1.6000.
Look at the price action, and provided there is no negative surprise in economic figures, the dollar strength may not return to those levels in the short while, or it may even proceed further.
Just my view, of course I may be wrong.
Look at the price action, and provided there is no negative surprise in economic figures, the dollar strength may not return to those levels in the short while, or it may even proceed further.
Just my view, of course I may be wrong.
mp6140
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Mp --- "blushing !" -- Sorry, But I Told Ya So !
In the neverending war between the fundamentalists and the chartisis, there exists hatred, displeasure and downright disgust, but if i can find my post of one month ago, where i laid out that a 10 year trendline had hit the top LRC on the EUR$, and that i was now short the EURO, one might just wonder about accuracies - - - - - -
allow that if I SAW THE TRENDLINE AND THE TOP LRC, the major players research departments saw them also and far more likely they saw it earlier !
given that information boys and girls, KNOWING what we do about forex and how it moves within the LRC, this was fairly obvious ----- what was even more obvious was that all these "majors" were ready to short the euro --- even TV was proclaiming that the dollar would rise from the ashes (just where, besides in dollar haters minds, do you THINK the dollar is going to go ?)
I have not plotted the dowside bottom, but will get around to it sooner or later as ive really only started trading the euro. coming from my old friends the pound !
I know there will be many who tell me its all bull durham, but those late nite phone calls from bernakie, asking where the price was in relation to the 10 year trendline, was what gave me the first clue !
I LOVES IT WHEN A PLAN COMES TOGETHER !!
enjoy and trade well
mp
In the neverending war between the fundamentalists and the chartisis, there exists hatred, displeasure and downright disgust, but if i can find my post of one month ago, where i laid out that a 10 year trendline had hit the top LRC on the EUR$, and that i was now short the EURO, one might just wonder about accuracies - - - - - -
allow that if I SAW THE TRENDLINE AND THE TOP LRC, the major players research departments saw them also and far more likely they saw it earlier !
given that information boys and girls, KNOWING what we do about forex and how it moves within the LRC, this was fairly obvious ----- what was even more obvious was that all these "majors" were ready to short the euro --- even TV was proclaiming that the dollar would rise from the ashes (just where, besides in dollar haters minds, do you THINK the dollar is going to go ?)
I have not plotted the dowside bottom, but will get around to it sooner or later as ive really only started trading the euro. coming from my old friends the pound !
I know there will be many who tell me its all bull durham, but those late nite phone calls from bernakie, asking where the price was in relation to the 10 year trendline, was what gave me the first clue !
I LOVES IT WHEN A PLAN COMES TOGETHER !!
enjoy and trade well
mp
Rhody Trader
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You're not. It hasn't.
There are ways to synthesize historical rates. The old ECU is often used as I'm pretty sure the weightings for it were the same as what was used in creating the EUR. The EUR was also set to the final ECU exchange rate when it was launched.
mp6140
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to be honest with you paul, i havent a clue but ill accept rhody's answer as it would make perfect sense ---- i have this thick red line, coming ALL THE WAY from over there on the left side of the chart to the right side, and it seems to be working
what ya want from a guy with so many things on his chart --- for me to know what they all are ?
LOL
mp
Atilla
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I'm surprised in all this talk there is no reference to
1. US budget defecit
2. US BoP defecit
With respect to the rest of the World and other currencies at all when looking at the dollar???
As US goes into recession one aspect of that will be reduced spending and less dollars in the system.
The other side of the coin is ECB and BoE may also be now looking at reducing their interest rates as the onslaught of a full blown recession rears its head on the horizon.
1. US budget defecit
2. US BoP defecit
With respect to the rest of the World and other currencies at all when looking at the dollar???
As US goes into recession one aspect of that will be reduced spending and less dollars in the system.
The other side of the coin is ECB and BoE may also be now looking at reducing their interest rates as the onslaught of a full blown recession rears its head on the horizon.
They're already swapping dollars with ECB and Swissy to ensure dollar liquidity which ahd virtually dried up with the demise of the swap market.
For pre Euro historical comparisons you can use the old DM as in fact it was the Dm that established the entry level for the Euro.
No clue about trend lines on that etc ,but this to me simply looks like more people banking profits from a very extended run than there are people establishing new positions.On that basis it only looks to me like a medium term correction at this point as opposed to an outright long term reversal and in fundamental terms that also appears reasonable as clearly the US still has many more problems to resolve than 'old europe' re 'bubbles' deflating and fiscal deficits.
For pre Euro historical comparisons you can use the old DM as in fact it was the Dm that established the entry level for the Euro.
No clue about trend lines on that etc ,but this to me simply looks like more people banking profits from a very extended run than there are people establishing new positions.On that basis it only looks to me like a medium term correction at this point as opposed to an outright long term reversal and in fundamental terms that also appears reasonable as clearly the US still has many more problems to resolve than 'old europe' re 'bubbles' deflating and fiscal deficits.
mp6140
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while i can in no way belittle these slight ripples in the financial worlds, WHY DID MY CHART TELL ME TO SHORT THE EURO WEEKS AGO ????
SPLAIN THAT TO ME !!!!!
attached chart is 5 year monthly, and the euro has done a normal thing for currencies --- starting high in the channel, it settled to the downside, made an attempt to rise back up, made a dbl bottom and then rose to the high side of the channel as it should, and now has hit top of channel and dropping again --- as you can see, this move actually started in late Feb/early March, but is now positively identified.
I KNOW --- funda mentals, fundamentals, fundamentals ---- but the charts tell the story !
LOL
mp
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mp6140
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me, id just look to the middle LRC line and see if it drops, but i would imagine, given vacations and such, we will see some hesitancy in moving down during the summer --- cant say what happens in sept though !
if it breaks the centerline, watch out below, but even a drop to the centerline means a lot of value involved.
also note, once it has hit the top and started down, even if it stalls or comes back up, its mind is made up for the downward slide, and nothing will stop that !
fundamentals are fun, but sooner or later they are always priced into the movements --- me, ill take charts which show me the sentiment and not the words !
mp
So did the fundamentals and with much the same accuracy...LOL ,BUT on a funny basis I for one would not have gone short at the time you made that remark as there was still more than enough momentum to worry any initial counter trend position. Short now fine,short back then ...I don't think so.
mp6140
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ever since high school (and maybe sooner -- who knows ?) ive been a loner --- not a "bit" of a loner, but a full blown, card carrying loner !
given that i sort of wander out there, paying no heed to many, i have 3 seperate trades in very nice profit at the moment on eurusd which were started at least last month --- i see and feel the markets differently i guess cause i dont spend anytime examing risk, just trend and tops !
mp
Rhody Trader
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No, it wasn't. Believe me, I was there in the middle of it because the analytic products I was working on had to be overhauled to adjust for the Euro (working over New Year's weekend, thank you very much
). The initial EUR peg was based on the old ECU (European Currency Unit), which was a basket. Had they just used the D-Mark rate the EUR would have started off below par against the USD as the DEM never reached better than 1:1.
Atilla
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A very colourful character that you are MP, and I concur with your views re:TA v FA. But nodoby including the markets can buck the FA in the long run.
I was simply responding to the threads title and question
- Rising dollar..why?!
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Has something fundamentally changed recently? Why has the USD been going up. Are they pricing in the fact that they think interest rates won't go down anymore?
It's good to see you doing well and so you should be proud. Well done mate.
Atilla
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No one's an absolute 'loner' ,they just can't 'see' all the other people doing the same thing
Risk, ha I laugh in the face of risk ,risk is nothing to me ,but a plaything to be ignored...right up until I have to write the cheque.
Were you ever a Lloyd's underwriter or name by any chance?
mp6140
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