How weak could the dollar go?

[ewilcox]

Noticed on the news last night the dollar weakend again against the pound to stand at 1.93 - and it ain't getting better today. How low do you think this will go and do you think this makes a trading opportunity (i.e. buy dollars expecting dollar to fall in near future to past levels) or a fundamental shift in forex levels for the forseeable future? Any views/thoughts on this subject?

ew

 

[Strategic Trader]

99.99% it will hit 2.40/2.50 - but might make it to 2.90/3.00 - but forget trading currencies - much easier ways to make money

 

[TheBramble]

Hmmmmm.....don't think so ST....

I'm not surprised you've found easier ways to make money than trading currencies.

 

[Strategic Trader]

mmmmmm - currency traders laughed when i said it would hit 2.40 - it was 1.40 at the time! and i have never traded currencies - only way to play that game is front running and easier ways to do even that

 

[Mr. Charts]

US $ needs to depreciate about another 25% to make the US current account deficit acceptable.
However, I doubt it will be allowed to go that far as the other implications of such a depreciation are too destabilising.
Richard

 

[maxpain]

The P&F charts usually not only gives a direction but also an estimated bottom/top

 

[Mayfly]

There’s one thing you can be totally sure about and that’s that the “old” European economy is being absolutely slaughtered in world markets right now.

This is “process” is working its way down from top to bottom, with the US & Japan ripping the heart out of European high tech industries – if that’s what they are - and the Chinese and others doing the same at the bottom end, while working their way up towards the top?

Anyway, I don’t suppose they’re losing a lot of sleep about these issues in Washington right now.

I’ve attached some longer term charts for added perspective and/or interest?

Sorry, it's too late for me to do the reciprocals tonight.

HTH

Cheers

Mayfly:

 

[adrip1]

it never ceases to amaze me how people try and predict what will happen in the future. I like the guy who is sure cable will hit 2.4. Mate that is a 1000 pips gain. Anybody who knows 99.99 percent that this gain will happen would a fool not to buy the £. U know why? Because with that amount of certainty, if (i mean when) it gets there u can become a millionaire. There aint many other fields where u can make that kind of money easily.

 

[Strategic Trader]

adrip

nope - you can have a target value -but to trade the target value needs to allow for volatilty in getting to that value -i dont trade currencies - so have no experience to evaluate the right entry point to avoid a short /medium term adverse move - and i never hold overnight unless in a fully hedged position -plus to trade currencies means dealing with a non-transparent pricing system - there are easier ways to make a buck

 

[ewilcox]

Thanks for all your views. Already at 1.95 now so 2.00 is looking more and more likely. A quote by someone at work summed it up on the issue of another US bond "Yet another drop in the ocean of debt". Also was amused (scared) by this site:

Debt Clock

Some figures on the US deficit: > $25,000 per american, increasing by around $19,000 per second, debt is now over 70% of US GDP

wow...scary biscuits and looking over some of the reports put out by the bush administration it doesn't look as though american intervention will be anytime soon to stop the slide.