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by Ashraf Laidi
Posted: Nov 3, 2008 15:51
Comments: 9
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This thread was started in response to the Article:

Elections, the Dollar, Stocks & the Economy

How the Dollar, Stocks and the Economy Fared in the last 38 years of US Partisan Politics.
 
   
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Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 6, 2008 17:22
Hamish,

Yes, i expect the dollar decline to be temporary later in the year coinciding with bear market rally in stocks. $1.37 is the max target for the euro during the upcoming equity bounce.

Ashraf
hamish
Canada
Posted Anonymously
16 years ago
Nov 6, 2008 16:26
Your response to Sorans caught my eye, namely leaning to a euro bounce 1.38. Is this predicated on a substancial bear market rally, long term technicals or a US economy that becomes more devastating than the Eurozone? Does a bounce also apply to the GBP?
Anyway I thought the flavour of the month are the low yielders!!
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 5, 2008 22:20
Sorans,

$1.17 is certainly viable, technically speaking. Im leaning towards a bounce near $1.38 before renewed declines towards $1.20, where a base will start to form for the next major rally.

Hamish,

As far as long term solutions are concerned, US savings must rise considerably while the dollar remains strong enough to attract foreign capital but not too strong to erode exports. Maybe the current recession will force savings higher, but it must come with increased savings from Asia.


Ashraf
hamish
Canada
Posted Anonymously
16 years ago
Nov 5, 2008 20:48
You wrote an article re: usd imbalance, now no longer on your website. What steps should the US take to correct? Intervene & revalue the $ ?
sorans
BEIJING,
Posted Anonymously
16 years ago
Nov 5, 2008 9:22
hi,Ashraf
Thank you for your articles, I hold a opinion that EURUSD will go down and maybe 1.17 is its first destination because of fundamental analysis, I think it is only a rally recently, and how do you think of EURUSD?
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 5, 2008 6:11
Jim,

The head and shoulder USDCAD formation is most prominent on the 4-hour chart. Based on my expectations for a bear market rally in stocks to as high as 1,100 in the S&P into year-end, we could see 1.1100 and a fresh recovery in USDCAD towards the right shoulder of 1.23 into early Q1 2009.

Ashraf
Jim
United States
Posted Anonymously
16 years ago
Nov 4, 2008 18:02
What do you think of the head and shoulders pattern on the USD/CAD on a 3 month 4 hour chart?
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 4, 2008 3:22
TF, dollar declines vs the yen do not have to be mimicked in EURJPY. I see the EURJPY low at near 110 yen, but there's the expectations that Eurozone rates may not have to drop as low as those in the US (Eurozone imbalances arent as large as those in the US). EURUSD seen dropping as low $1.20, but major technical support stands at $1.1740. The main theme here is that once the market volatility eases and economic deterioration remains, dollar will be a major loser and reflation trade starts to build gradually. That should also help EUR. Meanwhile, we have a 50-bp cut from the ECB this week, and a probable 75-bp cut from BoE, which will play negatively for EUR and GBP for a few more weeks.

Ashraf
TF
United States
Posted Anonymously
16 years ago
Nov 3, 2008 20:48
Hi there - this is noy exactly on topic, but sort of relates, as there is a lot of talk about a dollar 'correction' just at the time of the eletions and either now, December, or January, depending on who you believe.

People are saying hold off a dollar long position because the market is about to correct. So the key questions are for me - if the dollar/euro corrects, will the euro also get stronger against the yen ?

You forecast the yen at 79/80 in 2010 - so given the euro dollar still has further to go - the consensus being that after a correction the euro will get even weaker than it is now against the dollar, then correspondingly it must get weaker still against the yen.

The euro has lost 40% against the yen since July - how much further do you think it will go, and how would you expect that change to pan out during the next year, especially at the beginning where we exp[ect this dollar correction ?
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