Home > Markets > Forex Trading > Barron's : EUR/USD - Parity within 1 year

Barron's : EUR/USD - Parity within 1 year

  1. Rationale: Spain and Italy going "Greek"; US economy improves.
  2. either that or to make it easier to issue 1 world currency.

  3. it will never happen............

    big government will never give up currency leverage to move their economy.

    the weak joined into the euro with two big guns.
    they now realize the error of their ways.

    germany will exit the euro in 2012 and then we can all trade the d mark

    one more time.


  4. I'm very pessimistic about the euro but I cant see optimism on the usd to bet on parity.
    Believe it or not, much will happen overseas during this month to determine this...
  5. Interesting, thx for sharing
  6. That post was TOTALLY IRRELEVANT....I saw a chart on GOOG.
    Forex markets align with the economic and interest rate fundies I'm afraid.
    I did enjoy the one chart with all of the fib lines on it...it was classic "draw enough lines on a chart and the market is bound to hit one"....

  7. i luv to trade against you guys......

    alignment is for the 430's front end.

    let me call the floor, i will get the yen aligned to a zero interest rate that has been in place for the last 10 years.

    then you trade everything else off it and prove your theory.

  8. The best scenario would be for Greece and Portugal to leave the EU first and see if the rest can carry the euro thru...but about half of the economists out there think the the whole EU will implode within 3 yrs.....we'll see I guess
  9. The huge fall in European bank stocks during August is only a taste of what these future funding problems are going to look like.

    Europe's banks were forced to accept losses of at least 21% on their Greek bonds, which were actually trading down about 50%.

    Royal Bank of Scotland's accountants decided to actually mark their bonds to the market and took a $1.2 billion loss.

    The stock collapsed as a result – falling like a stone from the mid-$10s to less than $8.

    There are two key points to understand.

    First, most of Europe's banks didn't mark their Greek debt to the actual market price.

    They only took 21% losses.

    France's BNP and Belgium's Dexia "only" lost 534 million euros and 338 million euros, respectively.

    That's less than RBS lost, even though both BNP and Dexia own far more Greek debt.

    Most of Europe's banks took this 21% accounting compromise (Societe Generale, Deutsche Bank, and UniCredit) even though Greece will likely default at some point and even though the bonds are trading for much less than the 21%-loss level implies.

    That means sooner or later, these banks are going to have to take additional losses on these assets, probably more than double the losses they've already taken.

    That alone would make some of them insolvent. Likewise, almost all of the Greek banks would be left insolvent by a 50% decline in the value of Greece's government bonds.

    The second key point to understand is... ....

    a Greek default would almost surely trigger defaults in Ireland's, Portugal's, and Italy's bonds...
    and a downgrade of France's sovereign debt...

    as investors would flee these markets as sovereign borrowers attempted to prop up the banking system.

    The only solution is a massive bailout of Europe's banks. According to a recent study from consulting firm McKinsey & Co.,

    Europe's banks will require $3.5 trillion to $5 trillion in additional capital in order to meet the new Basel III global banking requirements.
    And that doesn't take into account the current fragility of Europe's bank financing arrangements.

    Roughly 50% of European bank assets are financed using funds borrowed from the U.S. money market.

    The only large sovereign lender with any real credit remaining is Germany, which for political reasons may be unwilling to bail out the entire European banking sector...

    and even if it wanted to do so, the magnitude of the capital that's needed would push Germany's sovereign debt total to more than 200% of GDP.

    It is very unlikely Germany will accept this obligation under any circumstance.

    Germany and two or three other northern European countries might decide to simply leave the euro altogether and use a reconstituted German mark as their currency.

    The remaining euro countries would then recapitalize their banking systems through inflation and a massive devaluation of the euro, which would no longer be a reserve currency.

    got all that......?

    looking forward to trading the Dmark once again.
    square corners and uber sleds.

  10. So if the USD is not the best, what is the best currency to short the Euro ? Swiss franc ? JPY ? GBP ?
  11. the trillion dollar question........

  12. So the DAX collapses and the EUO still hangs on to the 1.40s. Don't see that lasting long . . . and when it collapses, it will go fast, all the way to the teens.
  13. call it a roll n' puke.

    that is the beauty of the game.

    " non rational behavior can be capitalized ......"

    do not try to figure it out.

    just trade it.

  14. Hi! First time poster but long time reader. Go easy on me! I'm a new poster but I'm a very seasoned trader. I'm getting sick and tired of this Eurozone contagion. One minute everything is dire, the next minute everybody seems to completely forget about the mess, yet in reality nothing has changed; just a mere focus!

    With the SNB intervention and buying up of Euros, we have a strong player who will be underpinning the value of the Euro, therefore chances are we'll be ranging for a while from here.
  15. " I'm getting sick and tired of this Eurozone contagion.........."

    shop remedy prescribed.

    take 2 tylenol and check back in 6 to 12 months.....:)


  16. lol, I think it needs something a little bit stronger than tylenol mate!
  17. You're pretty smart. Only a catastrophe could hurt the Euro badly now.....Sure, it could go down, but not quickly.

    Time to move to the Yen I think......for more action. Selling Euro Forex call options may be the only decent play.
  18. Although if you really want to get in on some Euro action, you could short one of the other pairs, like the EUR/JPY.

    The SNB have billions in their back pocket; and they're ready to use it!
  19. Jimmy Rogers on CNBC today said "watch out" for an explosive reversal in the Euro should Germany bail out. We've had a nice down move so far. Can it get to 1.20 ?
  20. germany and few others will bail, just a question of when.

    and will be renamed the " euro peso."


    it can go where ever it wants to go and price means nothing.

    it is already puking out.

    when the fire alarm sounds there is no support.


    when it started to trade, it was under par.

    when it hit par , " they said ..." it won't go over....1.60 later.

    i have never figured out , who the hell are " they "

    so , " they " must still be short......:)

    if it pukes under par, they can now close the trade.


  21. shop, I'm with you. It's unpredictable, but this makes it a great short-term trading vehicle.
    Why stress over the long term direction ?
  22. sys wiz........

    all i want to know, where the hard right edge 5 minutes into the future is.........:)

    the rest is fluff.

  23. I'm with you on that....and so are all of the large investment banks....they are all into algorithmic trading in the Forex markets especially.
    At one bank: 1/2 million tickets per month !!!
  24. These Euro/U.S. Dollar parity predictions have happened during every major Euro selloff since 2005. Many were convinced of it during the 2008 financial crisis, even after the EURUSD clearly bounced around 1.18.

  25. oh really?
    my fx strategies generate sharpe ratio of 3.5 but there is no demand for it....
    would be great to do size of $20M per click.
    however, guys from FX Concepts have 55+ years of combined experience, which enabled them to produce -14% YTD and
    -18% in 2009. i should take a lessons :D