Discussion in 'Forex' started by niceneasy, Nov 22, 2007.
eur just printed. dollar in freefall. always seems to be that way on the holiday...
yep, took a massive hit last Thanksgiving night aswell.
Just rode it from 4804 to 4828, my calcs say resistance there.
1.5045 next stop I'd imagine.
yen and cad on fire as well. Should be some mkt in am.
Living outside of the USA for now, I feel I'm being robbed everyday!
haha, obviously 4928 wasn't the resistance I thought it might be we're up to 4950 now.
Will we see the 1.50 fall tonight..?
Next serious = resistance 2.0
Everyday the Euro stays above 1.25 it erodes business from European exporters.
As much as technical analysis can be fun and this uptrend seems unstoppable, there is a limit to everything.
I am not willing to call the top here, as far as I am concerned it could well go above 2.00.
However, keep in mind that it's not good for global economies to have one of the top currencies being devalued so much within such a short period of time.
On top of that, the Euro has been appreciating pretty much against all other crosses.
No doubt in my mind we are in a big Euro bubble. It's just matter of when it bursts, same for the tech bubble back in 2000 or the housing bubble these days.
Same for oil and gold.
Nothing seems to be stopping the Euro.
If you guys follow the very few European economic reports that are released, Europe isn't exactly booming.
It's all about the US.
My personal opinion is that currently the Euro is being used as a safe haven until the credit bubble spills over into Europe.
US was hit first, UK second. Why should Europe be left out of all this?
You guys seriously think European bankers are any different than all other crooks out there?
America needs a weak dollar right now to shore up its economy.
2008 is Election Year, which means Bush wants to finish off his mandate in the best possible way.
Bush doesn't care the US dollar is worth as much as toilet paper. Why should he care anyways? He doesn't care about account deficit nor the many young men's lives he's accountable for.
Until Bush gets out of office, US dollar will stay weak IMO.
fseitun, agree with much of that and I'm in Europe. The credit crunch has already hit here and will hit markets. The thing is that Trichet won't cut rates to stave it off. He appears to realise, unlike Benjamin, that it won't make a damn bit of difference. And his focus (and mandate) is on controlling inflation. I strongly believe that if you have a significant amount of cash reserve you will be very reticent about letting Bernanke devalue it considerably by totally losing control of inflation.
Sure growth is slow in the EU but it's steady and inflation is going to be kept in check. There's even a good chance Trichet will raise again in Q1 '08.
I live in Europe as well and yet I believe such a strong Euro will cause many problems for our economy.
Just think about this:
let's say a car company like BMW has total revenues of $10 Billions.
Let's say that 10% of that is represented by US market. That would be $1 Billion.
The Euro moved from 1.25 to 1.50, which is roughly 17% appreciation.
That would be a $170 Million loss for the european car manufacturer.
If the Euro continues to stay at these levels, other problems may arise...such as US car dealers refusing to import European cars due to higher costs...which would translate in revenues going down and having terrible consequences for the whole global economic system.
I remind you that the Euro has strengthened against every currency pair, so European exporters not only have a problem with the US market but also with other foreign markets.
It's going to be a matter of months before the current exchange rate affects the European economy.
If Trichet is smart enough, he'll anticipate this and keep rates steady or even ease up.
If he does raise rates again, that will be the dagger to the European economy.
well if you're in Europe you should, like me, definitely BE IN BED!!!
That's absolutely true, and BMW have suffered recently because of it. I don't think it will hurt us fatally though and the fact is that Trichet's remit is not growth BUT inflation. He will not ease until commodities fall, though we could be on the brink of that with the current Yen strengthening hitting the carry that has funded half these bubbles.
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