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Beating Down The Dollar

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http://www.forbes.com/markets/feeds/afx/20...afx2713369.html

"Even if the Fed hikes more than once, the market anticipates the yield gap between the US and other major economies to narrow anyway, suggesting that the dollar slide is likely to be sustained. "
" 'I think the dollar will experience broad-based depreciation in the coming months, particularly against the Asian currencies,' said Stephen Jen, a currency strategist at Morgan Stanley."
" 'I see a replay (a somewhat milder version) of what happened in late-2004, with speculators, the media, and some academics cooperating to try to push the dollar lower,' he added.

Looks like rocky seas ahead for the US currency.

I think it's time to buy up some Yen, and back the Nikkei.

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http://www.forbes.com/markets/feeds/afx/20...afx2713369.html

"Even if the Fed hikes more than once, the market anticipates the yield gap between the US and other major economies to narrow anyway, suggesting that the dollar slide is likely to be sustained. "
" 'I think the dollar will experience broad-based depreciation in the coming months, particularly against the Asian currencies,' said Stephen Jen, a currency strategist at Morgan Stanley."
" 'I see a replay (a somewhat milder version) of what happened in late-2004, with speculators, the media, and some academics cooperating to try to push the dollar lower,' he added.

Looks like rocky seas ahead for the US currency.

I think it's time to buy up some Yen, and back the Nikkei.

Everything points toward Asia I am afraid. With the US catching a nasty cold--currency wise--Europe will get the usual dose of flu. The Chinese and Japs (India?) have all the money and are behind the "values" of our inflated house prices. Once they pull the plug and take overall economic ascendancy IR will rise in the West to prevent haemorraging value back to the creditor nations.

I did buy into the Nikkei a few weeks back but have already lost 5% due to weakness in their stocks in the light of their IR tightening policies. My Canadian investments have fared better because of the soaring C dollar and rise in commodoties of which Canada has most of them (including vast oil reserves). Financial carnage lurks behind every door at the moment.

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Looks like rocky seas ahead for the US currency.

I think it's time to buy up some Yen, and back the Nikkei.

Go on then do it!

I am worried about the dollar because I get paid in $'s. That said it makes no sense that sterling is increasing in value against the greenback given the UK has the same debt problems and, unlike the US, UK businesses are clearly failing with little growth in the economy. Business here in the USA is booming because of the slow conversion to a low wage, low benefits, economy.

The real reason may be that the Fed are manipulating the markets and money supply in response to China's slow resistance to float the yuan. Why else stop reporting M3? There is a simple fact of life looming for China and that is oil supplies are slowly strangling the world economy, at some point people in the USA, EU and UK will stop taking on debt to buy goods. The world economies will then slowly decline with no reason for sterling to outperform the dollar - if you were given the choice of investing in the USA or UK given the previous comments where would your money go? Europe perhaps? That will certainly be the case for some but I can only see the euro sharing a some of the limelight not all of it. I suspect the reason for a slide in the dollar is partly emotional, i.e. fears about the cost of beating the hell out of Iran and the high rate of oil consumption in the USA. The trick is to watch for the upside as oil prices fall, the USA start to consume less (its all the rage here to have a hybrid) and as US environmentalists realise their comfortable lives are in jeopardy because of daft resistance to using colorado, alaska, utah and wyoming oil and gas reserves.

My bet is the pound will slide later in the year as reality slowly dawns on how profligate Gordon Brown is and how much it will cost to fund a society in which nearly 40% are non productive workers in the public sector.

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Go on then do it!

I am worried about the dollar because I get paid in $'s. That said it makes no sense that sterling is increasing in value against the greenback given the UK has the same debt problems and, unlike the US, UK businesses are clearly failing with little growth in the economy. Business here in the USA is booming because of the slow conversion to a low wage, low benefits, economy.

The real reason may be that the Fed are manipulating the markets and money supply in response to China's slow resistance to float the yuan. Why else stop reporting M3? There is a simple fact of life looming for China and that is oil supplies are slowly strangling the world economy, at some point people in the USA, EU and UK will stop taking on debt to buy goods. The world economies will then slowly decline with no reason for sterling to outperform the dollar - if you were given the choice of investing in the USA or UK given the previous comments where would your money go? Europe perhaps? That will certainly be the case for some but I can only see the euro sharing a some of the limelight not all of it. I suspect the reason for a slide in the dollar is partly emotional, i.e. fears about the cost of beating the hell out of Iran and the high rate of oil consumption in the USA. The trick is to watch for the upside as oil prices fall, the USA start to consume less (its all the rage here to have a hybrid) and as US environmentalists realise their comfortable lives are in jeopardy because of daft resistance to using colorado, alaska, utah and wyoming oil and gas reserves.

My bet is the pound will slide later in the year as reality slowly dawns on how profligate Gordon Brown is and how much it will cost to fund a society in which nearly 40% are non productive workers in the public sector.

I agree with most of what you say. The spotlight has yet to shine on Gordon's "Miracle Econmy" which is almost an exact duplicate of the US economy with almost the same level of personal debt and grossly inflated house prices We have 1.2 trillion pounds of debt compared with the US at 11.3 trillion dollars. After adjusting for population size (the US is more than 5 times as large) the figures are not that far apart. Also, the US has a GDP of about 5% compared with ours at less than half that amount despite Gordon's "predictions".

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Go on then do it!

I am worried about the dollar because I get paid in $'s. That said it makes no sense that sterling is increasing in value against the greenback given the UK has the same debt problems and, unlike the US, UK businesses are clearly failing with little growth in the economy. Business here in the USA is booming because of the slow conversion to a low wage, low benefits, economy.

The real reason may be that the Fed are manipulating the markets and money supply in response to China's slow resistance to float the yuan. Why else stop reporting M3? There is a simple fact of life looming for China and that is oil supplies are slowly strangling the world economy, at some point people in the USA, EU and UK will stop taking on debt to buy goods. The world economies will then slowly decline with no reason for sterling to outperform the dollar - if you were given the choice of investing in the USA or UK given the previous comments where would your money go? Europe perhaps? That will certainly be the case for some but I can only see the euro sharing a some of the limelight not all of it. I suspect the reason for a slide in the dollar is partly emotional, i.e. fears about the cost of beating the hell out of Iran and the high rate of oil consumption in the USA. The trick is to watch for the upside as oil prices fall, the USA start to consume less (its all the rage here to have a hybrid) and as US environmentalists realise their comfortable lives are in jeopardy because of daft resistance to using colorado, alaska, utah and wyoming oil and gas reserves.

My bet is the pound will slide later in the year as reality slowly dawns on how profligate Gordon Brown is and how much it will cost to fund a society in which nearly 40% are non productive workers in the public sector.

I hope you are right. I hold a considerable amount in $ :( ( Have no choice as I use the $ on a daily basis)

It is most depressing watching $ sinking so fast against Cable especially as (IMO) there is no real reason why cable should be trading so high.

If the Elections go really badly this Thursday for Nu Labour maybe then the market MIGHT start to target cable.

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I hope you are right. I hold a considerable amount in $ :( ( Have no choice as I use the $ on a daily basis)

It is most depressing watching $ sinking so fast against Cable especially as (IMO) there is no real reason why cable should be trading so high.

If the Elections go really badly this Thursday for Nu Labour maybe then the market MIGHT start to target cable.

I am 80% in US $ and am not too worried because its the relationship to UKP that concern me if I want to buy a house in the UK after the HPC! IMHO, the US econmy is considerably healthier than the UK therefore the forces of equilibrium will return CABLE to a value based position. I am in Texas for a few days and have met with some high powered business people in the chemical industry and things are going well here with huge exports to China who are dependent on US know-how. The US are making enormous investments into the Chinese market and some of that profit will be headed back into US $.

The message is slowly getting through that gas prices will also reach equilibrium with $5 a gallon not that far away. Honda are doing nicely in the US market as gas guzzlers begin to fade from popularity. Its a small start but it shows a shift. The US is far from over but short term its going to be rocky. High IR pain will be the medicine the Fed will have to use to keep the bonds attractive to Asian investors and the two-way trade that is grwoing will keep the dollar from tanking.

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Latest from the currency market:

http://www.fxstreet.com/nou/content/113210...rket&dia=252006

The U.S. dollar has been seriously affected in April, weighed down by a combination of factors including the record U.S. deficit, oil price, foreign central banks diversifying their reserves, and a more aggressive outlook for interest rates in the euro zone.
For the time being we expected the dollar to stay at current ranges against the euro, but further losses may occur, depending how worn out the
bearish trend
is at the moment.
High volatility is expected on the Sterling. Any positions should be accompanied by tight stops.

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Guest Riser

Looks like the start of another bad day for the Dollar down 0.5% against most currencies, I can't wait until its Sterlings turn to get flushed down the toilet, come on MPC hold those rates I dare you :P

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Looks like the start of another bad day for the Dollar down 0.5% against most currencies, I can't wait until its Sterlings turn to get flushed down the toilet, come on MPC hold those rates I dare you :P

I think that there'll be definite hints towards a rate rise in the next BoE minutes - the hawkish language in itself rather than the actual rate rise is often enough to buoy the pound.

No mistaking the global trend is there - Oz rates up today and we will follow.

I think that the global banks are co-ordinating the whole thing. Perhaps they've had enough of the credit bubble and quite frankly so am I.

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Guest Riser

I think that there'll be definite hints towards a rate rise in the next BoE minutes - the hawkish language in itself rather than the actual rate rise is often enough to buoy the pound.

No mistaking the global trend is there - Oz rates up today and we will follow.

I think that the global banks are co-ordinating the whole thing. Perhaps they've had enough of the credit bubble and quite frankly so am I.

I will no longer be content with a normal 10% per year crash I want it to be hard and fast. The longer the MPC hold rates the harder the market will snap back and undershoot the long term trend.

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I will no longer be content with a normal 10% per year crash I want it to be hard and fast.

I am wondering what might happen to my employment prospects in a deep recession that a "hard and fast" fall would reflect, although should I lose my job I know that I have free shelter and lots of savings to fall back on.

It would be good if property did undershoot on the way down like it did before, and then it would be the time to buy. Still a fair old way to go though...

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Looks like GW-Bush’s plan is all failing apart !

Yes he had the twin towers pulled as an excuse to make a grab for the oil but this has only polarised the world to drop PetroDollars and make efforts to secure their own supplies of oil and place like Russia are doing very well indeed whilst GW-Bush watches his rating crumble.

I got out of Pound into euro’s long ago and now feel the need to acquire a few yen and I won’t be back into the £Pound until brown stops fiddling with the inflation figures in a vain attempt to suppress wages. It’s not the norm to have a boom (Credit Created) and little to no inflation or wage rises and now see how they fail as Nu-Labour is flooding the country with cheap imported labour.

The working man has a hard time ahead

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Guest Riser

I am wondering what might happen to my employment prospects in a deep recession that a "hard and fast" fall would reflect, although should I lose my job I know that I have free shelter and lots of savings to fall back on.

It would be good if property did undershoot on the way down like it did before, and then it would be the time to buy. Still a fair old way to go though...

Just look speed at which some markets are moving, the Internet has transformed share dealing, ETFs have transformed the commodity market, countries and their governments are no longer able to isolate themselves from the global economy.

The global economy has hit the boost button and the nitrous of low interest rates is about to blow the engine.

Edited by Riser

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Go on then do it!

I am worried about the dollar because I get paid in $'s. That said it makes no sense that sterling is increasing in value against the greenback given the UK has the same debt problems and, unlike the US, UK businesses are clearly failing with little growth in the economy. Business here in the USA is booming because of the slow conversion to a low wage, low benefits, economy.

The real reason may be that the Fed are manipulating the markets and money supply in response to China's slow resistance to float the yuan. Why else stop reporting M3? There is a simple fact of life looming for China and that is oil supplies are slowly strangling the world economy, at some point people in the USA, EU and UK will stop taking on debt to buy goods. The world economies will then slowly decline with no reason for sterling to outperform the dollar - if you were given the choice of investing in the USA or UK given the previous comments where would your money go? Europe perhaps? That will certainly be the case for some but I can only see the euro sharing a some of the limelight not all of it. I suspect the reason for a slide in the dollar is partly emotional, i.e. fears about the cost of beating the hell out of Iran and the high rate of oil consumption in the USA. The trick is to watch for the upside as oil prices fall, the USA start to consume less (its all the rage here to have a hybrid) and as US environmentalists realise their comfortable lives are in jeopardy because of daft resistance to using colorado, alaska, utah and wyoming oil and gas reserves.

My bet is the pound will slide later in the year as reality slowly dawns on how profligate Gordon Brown is and how much it will cost to fund a society in which nearly 40% are non productive workers in the public sector.

Very interesting analysis. I agree with much of what you say

I will need to buy USD within next few months last large purchase was at $1.91 think it may get around this figure. It is possible $2+ but I agree there will be a rebalance when it is seen UK outlook is not as rosey as US

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  • 335 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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