Thursday, 10 September 2009

EUR/USD position

Added a new position.

Bought 1m EUR at 1.4465 sold USD.

Did this yesterday on the break higher. Was doubtful whether it would go on , so have a stop on it at 1.4450.

We will see how weak this USD really is.


Tim said...

Living in the USA, and hearing the news here, I can understand pessimism on the dollar. That and the price of gold shooting up... And there's that idea floating around that China and everyone else want to move away from USD as reserve currency. That's the killer, isn't it.

But I wonder what a more informed perspective on Europe would say at the moment?

Anything more concrete than the general sentiments above that weighs into your decisions this time?

peterquixote said...

dude the $USA is really weak, how could it be strong, the health program alone will screw them, there will shortly be a new dominant currency, and maybe you have got it right, $EURO, then after a while when we get rid of those cows $NZ,

Anonymous said...

Tim, take a look at Germany, using dollars to issue bonds. Interesting and I think more EU countries will do the same because fo the yield situation. The thing is, while the US may be in a tight spot, so are other major economies. And on the resources and politics fronts, China is in deep shit, so to speak. The next ten years will be interesting for sure. (I think predicting the demise of the US economy/financial system based on the present healthcare bill proposal is silly. Even using it as a heavily weighted factor is silly, considering what we spend on medicare and medicaid now.)

Tim said...

Hm, thanks lonely, for pointing out that it isn't acctually everyone who wants to move away from Dollars, pretty much just China.

I don't know that I see non-US countries issuing USD bonds as a sign of real long-term strength for the dollar. It could be seen as a 'short' of the dollar vs their own currency.

I don't see Obamacare as a negative, I see it as a positive. Health care costs are ridiculous here if you don't have insurance. Everyone having insurance and government competing with private sector seems like a big improvement on what they have now, and ought to benefit the economy long term.

Kiwi Trader said...

Hi guys
I like the Euro over the USD in the long term.

The US, UK, Europe have serious banking and economic problems. It is the solutions that worry me. The US is printing money, so is Japan and the UK. By that I mean that the central bank is using its balance sheet to buy Government bonds.

Europe is not. They are buying covered bonds which is corporate/bank paper backed by property assets (covered). Europe is not quantitative easing.

Hence the Euro will lift against the USD over time.

The US needs a weak USD, it helps exports and it helps employment (US workers become cheaper).

Central banks are moving any new money into other currencies (and gold) and not USDs.

That is the big trend, and I can't see at this stage what is going to change that for years to come.

The correction, when it comes, will only attract another wave of USD sellers.....and we haven't seen the real extent of the US debt problem yet.

Another fact: US M2 is up 1,100,000,000,000 over the last 2 years.

How can you expand money supply that much and NOT have a weaker currency?

Kiwi Trader said...

US healthcare reform is not a big deal for the currency markets, and I have barely given it any thought.

I will check out the reasons behind Germany issuing US bonds and get back.

I can't believe it is a simple currency play!