Wednesday, July 1, 2009

Global currency?

Dollar Falls; Report Says China Wants G8 Forex Debate

The dollar sold off Wednesday afternoon, falling nearly a full cent against the euro. The move came after a report that China has asked to discuss the issue of a new global currency at next week's Group of Eight summit in Italy.

Posted by devo @ 07:12 PM (970 views)
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9 thoughts on “Global currency?

  • Anyone know the proposals for a new currency? The Euro, Yuan or a “basket”?

    Any good rumours?

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  • paranoia blue says:

    A “basket” including gold, and other [semi-] precious metals.

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  • The basket’s been mentioned alongside SDRs, which I’ve heard criticised as rearranging the furniture.

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  • The euro spiked from around $1.4125, now Europeans think they do good economics but keeping the Euro strong is insane while Americans are using the bad news to weaken the dollar and reduce deficit. And what is UK doing? Whatever Americans do although UK economy is a lot diferent.

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  • It seems inconceivable to me that the Chinese would make noises about a new global currency without understanding the implications of their words. Perhaps they are firing a warning shot at the USA to remind them how vulnerable their reserve currency status is? If I’m right, we’ll be reading a lot more articles like this over the next few years while China diversifies into assets with long term value and probably some more gold. Of course a game like that could get out of control …

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  • Basket of currencies and precious metals.

    A global world reserve currency should be exactly what it says on the tin……global. A mixture of all continents with a percentage of gold.

    The global economy is being held back with a one country reserve currency.

    $ is finished. kaput, finito, dead, over and out. it has nothing to offer anymore, the country is in too much debt and by buying it’s own debt is literally eating itself to stay alive.

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  • Actually im with bellweather on this the $ is going to get stronger, either now or after 1 last push down. When the $ was 1.58 against cable i said it goes to 1.64 – 1.65. There has been alot of trading around this area and then a pop above the resistance which was a bull trap (so far). If it does go higher then the low 1.70s will – IMO – exhaust the move.

    EVENTUALLY yes there may be a run on the $. But that will be bourne out in time. Has this happened before? (i.e. calling for the $ to end as a reserve currency?) I believe it has.

    Personally i favour the £/Euro trade – 8400 looked overdone (i was looking for between 8500 and 8600, i dipped my toe (i.e. small position)in @ 8470 basis cash – after a retracement from the first leg up, (always a dangerous time to pre-empt a trend change without confirmation). This is a long term trade – which i will hopefully be adding to on the pullbacks – eventually looking for the Euro to challenge parity. Since the $ rises imo v. the Euro as well – cable gets well and truly hit on the crosses.

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  • george monsoon says:

    Ok, I am trying to make sense of all this and in the process, filling the gaps in my knowledge with guesswork.

    So.. in a nutshell, should we all be buying dollars / Euiro’s now in the hope that they will strengthen?

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  • GM – Depends what you or who you want to believe! IF you are referring to my post – then:

    Expect $ to go higher against both EUR and GBP (perhaps after one last push in the other direction).
    Expect EUR to go higher against GBP

    This morning i got out of a bit of my EUR position @ 8620 (its now 8580) bought @ 8470. Was expecting it to come back a bit because there is a descending trendline that one the FIRST go it was probably going to have trouble breaching. We may still be in a downtrend (in the Sep futures) which is why i said it was a bit dangerous. A chart would probably help you to see what i mean.

    Of course not 100% sure i am right and its not meant to be a piece of advice to buy / sell just an opinion.

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