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Home >> Stock Forums >> The US Dollar....

The US Dollar....

JCast3 said: "so the fed cut rates again yesterday, only 25 basis points this time....i guess the language of the fed notes seemed to say that they dont forsee any more cuts in the immediate future....but still i decided to take a position against the dollar, namely long EUR/USD.... my unprofessional opinion: to me it doesnt look like the european central bank is going to be cutting their rates any time soon, in fact, you could make an argument for a rate hike....from what ive gathered, as of now the euro is getting its strength from Germany whose economy has been a powerhouse as of recent....however, inflation is fast becoming a major concern for the german economy as well....so how do you combat inflation, raise rates....if this is the case, and the german economy is what is powering the euro, then one could reasonably conclude that at worst, rates will remain the same for the time being....so, i'm looking for the euro to continue its appreciation against the struggling dollar.... other news ive been reading seems to conclude that the japanese yen is in for a major revesal against the dollar....the general consensus seems to be quite bearish for USD/JPY....so i'm also thinking about taking a short position there....i'd like a little more concrete info on this before jumping in though, just dont really know where to find it...."

lil dickie said: "Interesting speculation. I hate to say it but your guess is as good as anyones. Anything can happen when it comes to currencies."

AlfredSokol said: "These are dangerous times to be speculating on currencies IMHO. Lots of currents at work."

newinvestor123 said: "Quite right Jcast, quite right. The US is the only country which can't (or won't) raise rates because a hike would have a terrible effect on our economy. While every large country in the world, from Japan to the Eurozone, to England to Australia, China and India are looking like they are going to begin raising rates on inflation fears, we are looking like we may continue lowering them because "inflation is moderate." Even if we DON'T lower rates again, we probably aren't going to RAISE rates any time soon, which will make us the odd country out. When the FED changes their intentions from saving the economy at all costs to saving the dollar at all costs, the dollar's decline may stop. Until then, I see it going nowhere but down."

JCast3 said: "[QUOTE=newinvestor123]While every large country in the world, from Japan to the Eurozone, to England to Australia, China and India are looking like they are going to begin raising rates on inflation fears, we are looking like we may continue lowering them because "inflation is moderate." [/QUOTE] australia hiked rates yesterday, and the report sounded like they may not be finished....i guess AUD is another currency that we can look to even up with the US dollar soon.... just to change the subject....i think the whole, "inflation is not a problem in the US" thing, is complete bullshit...."

newinvestor123 said: "[QUOTE=JCast3]just to change the subject....i think the whole, "inflation is not a problem in the US" thing, is complete bullshit....[/QUOTE] Of course it is. The price of everything, from cars to college tuition to medical care to food, energy and clothes is rising. The only products which are declining or remaining static in price are electronics, specifically computers, or anything else made in China for that matter - But that too will soon end as Chinese workers move up the economic ladder AND rising Chinese inflation requires that they be paid more, which will drive up the cost of Chinese made goods. My father believes that the FED is intentionally fudging the inflation numbers, but I'm not so sure that is the case - The only long term reason they would have for doing that would be a complete devaluation of the dollar, which only makes sense up to a point. All this money creation will catch up to us eventually, it's just a matter of when... As long as the FED is creating so much money out of thin air, as long as our debt is growing, and as long as we are the only country which is not raising rates, the dollar will continue to fall."

Corey said: "A completely subjective observation, but in my opinion, the weak dollar is the last stand for our housing market. A friend of mine who spends quite a bit of time in New York City and who has spent quite a bit of time with the New York City real estate market has seen a huge influx of foreign purchasers, who are basically looking at property as if it had a '40% off' tag on it. The only thing keeping certain 'hot' housing markets hot is the fact that foreign investors are able to pay our prices, but still have it be 'cheap' do to the exchange rate..."

JAP said: "Here is a chart you might be interested in. Draw your own conclusions: [IMG]http://www.stocktiming.com/images/2007/NOV07/7%20WEDNESDAY/DOLLAR%20D.png[/IMG]"

FirefighterB said: "[QUOTE=Corey]A completely subjective observation, but in my opinion, the weak dollar is the last stand for our housing market. A friend of mine who spends quite a bit of time in New York City and who has spent quite a bit of time with the New York City real estate market has seen a huge influx of foreign purchasers, who are basically looking at property as if it had a '40% off' tag on it. The only thing keeping certain 'hot' housing markets hot is the fact that foreign investors are able to pay our prices, but still have it be 'cheap' do to the exchange rate...[/QUOTE] You're right on that, Corey. The large foreign investment is about the only thing that keeps the NYC market from dying like the rest of the country, but, it's coming. The foreclosure times are (I think) the highest in the country here (440 days, on average...Texas is 21 days), so it's also delayed in that aspect. However, the foreign investors are also getting turned away by banks, due to the fact many don't want to spend the time checking job status, income, W2s, etc. So, foreign investors are forced to buy in cash. While it might be at a discount from normal with the weaker dollar, they still are taking the money out of their country/investments and bringing them to this market. Even this, according to some articles I've read in the pretty local RE rag (the Real Deal), will dry up. Things are looking to begin falling here, ESPECIALLY when Wall Street bonuses are cut. There aren't enough foreign investors (I don't believe) that can make up for a HUGE portion of the NY work force losing their bonuses...or their jobs."

newinvestor123 said: "[QUOTE=JAP]Here is a chart you might be interested in. Draw your own conclusions: [IMG]http://www.stocktiming.com/images/2007/NOV07/7%20WEDNESDAY/DOLLAR%20D.png[/IMG][/QUOTE] Looks like it's time for a bounce - That's an interesting chart, JAP. Where did you get it?"

lil dickie said: "Isnt the time to go long when everyone is completely hopeless? Maybe the dollar is due for a rebound."