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This thread was started in response to the Analytic:
Speculators' Futures FX Positions
The weekly figures on traders' futures commitments obtained from the Chicago Mercantile Exchange's International Monetary Market shed valuable light on the developing flows pursuing one currency versus another.
There is no V recovery, I think all of traders, speculators, and central banks know about it.
And stock market usually don't influence currencies so much but commodities price.
We all know that FED will not decrease its debts but increase it every much more. US trading deficit still remain high in the historical record. It won't be plus any time soon.
You should watch when stock market goes down, Yen start rising, but USD, today is a very good example. Central banks and investors are questioning USD status now.
If we use the theory which is base on the economy text book to valuate USD, it will be worth as toilet paper.
By the way, I think most of us check banks forecast everyday......and we all know that they are cutting forecast on USD. They will cut again soon.
I am not bullish on GBP, but I am more bearish on USD.
u cannot predict what the fed will do. us trade deficit is very imprtant and if this narrows over time it will support dollar from falling and even help it rise at best.
i am bullish because the dollar is currently cheap based on PPP and bank models. it has risen sharply due to a rush of dollar funds into international risk portfolios etc.
but if we do dont have a v shape recovery in the economic cycle which i dont think we will risk aversion is likely to come back in to fashion. we had a v shape in us during the start of 2000 but not this time.
i think fund managers will scale back risk positions as equities looking more and more expensive on the earnings side and as we go forward quarter and quarter earnings will look decreasingly impressive. some banks are only making sizeable gains on obvious trading patterns.
we will see a broad contraction in demand as central banks decide to hike rates and that is when the dollar will come back to haunt the bears
I am a question for you.
why are you bullish on USD in medium term? Is there any reason? or just because USD has declined so much this year?
On my view, USA has tripled its debts this year, and there is no signal that they will stop increase debts. They will run printing money as faster as they can......
I just read the paper from Deutche bank's forecast. it said EUR/USD will go to 1.3 by the end of this year. But I didn't find any words about US debts problem and its printing money issue on the paper. The only thing I can find is about trading deficit, but it was just 2 lines.
I can't believe this report is from a bank. I doubt that he must smoke something when he was writing on it.
I think there will be a correction in the near term. but USD will continue declining in medium term and in long term....
US dollar index is towards 72...and will break 70 in long term.
1.75 is ashraf's forecast and quite a few others so we'll see. but you must understand that current value of cable is overvalued and it will drift substantially lower in medium term.
If I am not wrong, you predicted that cable would not break 1.7.......anyway, hope your dog still alive.
Good luck!!!
however, as we go forward there is likely to be less good news quarter on quarter and the high possibility of interest rate hikes and a stop in QE may reverse much of recent gains that helped keep down bond market rates. therefore i believe the market can still rally this quarter but if Fed or BoE change monetary stance markets can be worse q4 a benefit to the dollar.
Ashraf what happens to Cable now given the year end target for it was around 170. How do you foresee this play out?
Regards
Steven
Thx
Gunjack