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by Ashraf Laidi
Posted: May 20, 2009 20:02
Comments: 87
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This thread was started in response to the Article:

Dollar Slashed as Fed Goes Shopping

Fed's latest bond buybacks triggers fresh dollar damage, while VIX downside does not spell out the end of equity selling.
 
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taha
Cairo, Egypt
Posts: 50
16 years ago
May 23, 2009 11:20
and for long term or medium do suggest to sell Gbp /Usd ?
taha
Cairo, Egypt
Posts: 50
16 years ago
May 23, 2009 11:02
Hi Ashraf ,
Will we see Gbp/Usd at 1.650 this week ?
Thank you
hedge
Singapore
Posts: 9
16 years ago
May 23, 2009 5:21
ashraf, i agree this was an unbelievable week against the dollar. your workbook maks the case for dollar going up when stoks go down which was the case since 2006 according to the charts. is the dollar losing this pattern of rising on safe heaven flows? or do we need bigger selling in stocks? or for longer period? thanks

hedged
bubbles
Vancouver, Canada
Posted Anonymously
16 years ago
May 23, 2009 2:43
Hi Ashraf. 2 Questions for you. Based on the USD Index, how low do you see the USD going before the fed is forced to raise interest rates? And do you see this happening sooner than the fed might want?
Ashraf Laidi
London, UK
Posts: 0
16 years ago
May 23, 2009 1:47
Rob, I trust the US economy will cope better than Japan did in the 1990s in the sense of tackling its banking problems head on, but the next 5-7 years could shape up to be at 1-2% growth at most, which is below trend growth. And that could be fairly similar in Europe.

Ashraf
Rob
New York, United States
Posts: 305
16 years ago
May 22, 2009 22:24
Ugh, I here you loud and clear on that Ashraf - any general forecasts on the US economy would be appreciated. You mentioned an "L"-shaped recovery in one of your interviews today, if I'm not mistaken. Do you project a "lost decade" type scenario and near depression in the US ahead? Thanks.
Ashraf Laidi
London, UK
Posts: 0
16 years ago
May 22, 2009 20:19
Aviat, making a claim such as the "US is the best of the worst" opens up a whole new discussion that tend to reach socioeconomic boundaries that are beyond the scope of Forex market supply and demand. The hard currency discipline of the ECB may have some macroeconomic hardships but not on its currency, while the Fed is now suffering the worst of corroding home values, contracting credit, soaring unemployment each underlined by severe consumer deleveraging. a country that depended on credit for so much longer than europe is now having that "drug" taken away from it. And the consumer has now left a void in aggregate demand. And thats not good for the consumer/debt-dependent US dollar.

Ashraf
aviat72
New York, United States
Posts: 12
16 years ago
May 22, 2009 19:47
Ashraf:

Thanks for your summary of the difference between the US and the Euro-Zone in terms of the consumer, unemployment, banks etc. I will appreciate any pointers for a deeper analysis of the issue.

This trend in the Euro is very strong, and as you said earlier currencies trend a lot. From whatever little I know, the US is still the best of the worst when it comes to the developed world. So not sure whether this run in the Euro is sustainable, unlike the commodity currencies.
Ashraf Laidi
London, UK
Posts: 0
16 years ago
May 22, 2009 17:31
Vankata, yes, indeed. Im still in that short AUDNZD trade at 1.2770 and we should target the key support of 1.2550. it's a decent hedge trade if you're long AUSDUSD, which is a great long term position.

Ashraf
vankata
Plovdiv, Bulgaria
Posts: 3
16 years ago
May 22, 2009 17:15
Hi Ashraf, since we are expectin some leveling off of china's lending of the banks and PMI, could we expect some levelin off of the currencies that were rallying on the optimism of china at least relative to their pears in the group, I am talking for aud/nzd
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