I read somewhere on the 'pin that someone’s (johnboy’s?) FX trader friends were expecting the euro to hit 1.30-1.35 before falling back again. Take it as you see it - an anonymous rumour on a bulletin board!
I think the exigecies of capital flows and FX trading bets far outweigh the fundamentals of the currency units. It’s not so much confidence as roulette!
Its more a case of the USD falling than EUR rising. There has been a slew of bad data in the US and Interest rates spread differentials have converged as people push further out into the future the day of any Fed hike. This coupled with the fact that people fear the US will be more willing to provide more stimulus than ECB say.
EUR hasn’t done anything in last 2 months vs the JPY for example
In any case, personally I feel that as we reach 1.30 area the EURO is very vulnerable to any bad news in the Eurozone. Alot of the shorts have been squeezed out by now…However, for now I would prefer be short versus the Yen at 113.50 area. The Yen will be allowed strengthen more because its hard for the Japanese to justify talking down their Ccy (as they like to do on strength) when the Chinese (their Neighbour) are being pushed by the US into letting their Ccy appreciate
nothing goes down in a straight line. The Euro and in particular the chf were oversold as ap states its dollar weakness versus euro strength moreover. Longer term expect the value of every dollar to inflate as there are less and less of them in circulation. The US has more control over the dollar and its still the worlds reserve currency whereas theres a real threat of the euro breaking up. Now might be a good time to hedge savings to other currencies
I don’t bring cash anymore, I take it out using my laser when there, most I have taken out is $500, you will get charged a handling fee, but you get todays rate, not one that your local bank makes 5% on.
Euro will be $1.20 by year end… I sold Euro in April at 1.48, I expect it to be 1.15 to 1.10 in March 2011.
The US situation is no better than the Eurozone “on aggregate” and maybe marginally worse.
However, the US is one country, with one Government and one Fiscal policy Versus Europe which is a mish-mash of Insolvent PiiGs and Germany / France.
The reality is that it will be easier for the US and the Uk for that matter to sort out their mess, while the solution for the Eurozone is not that clear-cut as one side will have to pay a massive price to achieve equilibrium.
I mean does Germany agree to destroy its standard of living to bail out the lazy Greeks and over-indebted Spanish / Irish etc…Not likely without some kind of major social unrest. Or do the Berlin Club decide to bite the bullet and force the insolvent members to restructure causing massive permanent losses for those who invested in PiiG bonds…this is much more likely.
At the end of the day, no one knows what the EURO will look like 10 years for now, and this uncertainty will keep pressure on it for a long time
I own Euros only because I am Irish and know I have somewhere to spend it. If I was from outside Europe I wouldnt touch the thing!! Even GBP to me is a better alternative
Definitely not my mates! I don’t think many traders have any more of an insight into these matters than most posters here.
I think it was bearishbull who advocated a contrarian stance with currency predictions. The more one hears of a currency/country’s invevitable demise, the more that currency is likely to outperform in the near-term. Also, recent US economic data has been pretty crappy whereas the euro was pricing in an economic crisis.