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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.
 
Ashraf Laidi
New York, United States
Posted Anonymously
10 years ago
May 21, 2009 23:34
fx318, since US treasuries are the most sought after govt paper by foreigners and ONLY the US can print the currency of the country of that bond i.e. US. yes it will be inflationary, so basically the very reason that it can continue to print (and go to congress to ask for higher borrowing limit) is why it is bad for the dollar. Now this uses to be a LONG TERM fear, but things have accelerated so much that we may be nearing the end game.

Ed, that's a very good point. A lot has happened since yesterday (believe it or not) and Im in the process of revising my forecast for that last bounce in the dollar. Will a bounce of more than 7% in the dollar index happen? We may have to have a 7-10% stocks slide to possibly see Oil under pressure and Canadian dollar selling off. My rationale is that Canada could get hurt again by rising CAD. Im more in favour of 1.20 than 1.25 right now. but i do see 20% chance for 1.25 because there's possibility will do quantitative easing in June.


Ashraf
Ed
United States
Posts: 3
10 years ago
May 21, 2009 23:03
Ashraf, it seems your strong anti-dollar slant is at odds with your response yesterday about USD/CAD revisiting 1.25...?
fx618
Massachusetts, United States
Posts: 5
10 years ago
May 21, 2009 22:49
Hi Ashraf,

On your twitter site, you mentioned US many not lose its AAA credit rating b/c it can print currency. Can you clarify why US can and other countries can't w/o losing its ratings. I understand that USD is the reserve currency but still will be inflationary... Thanks!
Ashraf Laidi
London, UK
Posts: 0
10 years ago
May 21, 2009 21:24
Tim, we may eventually head there once stocks lose more but lets start with those targets first. Nikkei had not lost big these past sessions, so let's see how it will do. And i believe the Asians may be eager to further sell USD on these rating rumblings.

Ashraf
Tim
North Carolina, United States
Posts: 6
10 years ago
May 21, 2009 21:14
Thanks Ashraf
re "Look for 129.60 and 129.20" - So you don't see EURJPY going below May 17 low (~127.00)?
Ashraf Laidi
London, UK
Posts: 0
10 years ago
May 21, 2009 21:11
Amir, big time USD weakness. Worries that US could lose its AAA rating. I will speak more about this tomorrow for the whole hour on CNBC Squawk Box from 6 to 7 am BST.

Ashraf
Amir AK
Cairo, Egypt
Posts: 6
10 years ago
May 21, 2009 19:22
Hi Ashraf,

Quite a selloff in equities as well as the USD, any thoughts?
Rob
New York, United States
Posts: 305
10 years ago
May 21, 2009 17:09
Hey Ashraf,
I haven't watched the markets much this morning - but is there any good reason for Yen to be losing ground while equities are doing the same - it doesn't look like the typical risk aversion plays are going the way they usually do with falling stocks - any thoughts are appreciated
Ashraf Laidi
UK
Posted Anonymously
10 years ago
May 21, 2009 17:00
Cougar, Indeed

Ashraf
cougr
Australia
Posts: 101
10 years ago
May 21, 2009 16:42
Ashraf you comments in the previous post regarding the EUR JPY have just confirmed my assumptions about this pair . Looking at the charts it seems that once support that you mention are broken it can swiftly reach 127 or thereabouts.