Best Currency Forecasters Say Dollar Slump Over

Modbert

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Sep 2, 2008
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Best Currency Forecasters Say Dollar Slump Over - Bloomberg

The best currency forecasters say the dollar’s 12 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency.

Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.

While Moody’s Investors Service added to Europe’s woes last week by lowering Portugal’s credit ranking to junk, the dollar is regaining its status as a haven after the worst performance over the past year among 10 developed-market currencies based on Bloomberg Correlation-Weighted Indexes. The dollar is up 5.9 percent from a 17-month low on May 4 against the euro.

Hedge funds and other large speculators are no longer betting the dollar is going to collapse.

Wagers on a decline against peers including the euro, yen and pound were 203,230 on July 5, data from the Commodity Futures Trading Commission in Washington showed last week. That’s down from 405,267 in March, the most since at least November 2003.

Interesting.
 
Yes, the rest of the world is even more fucked up than we are; think of it as we're the last part of the Titanic to go down, so in comparison -- we rule!!
 
QE2 is over, no sign of a QE3 yet. One wonders what the Fed will do if the UE still look bad going into the fall. But yeah, we seem to be the best of a bad bargain right now, outside maybe of some developing countries that are going gangbusters.
 
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Best Currency Forecasters Say Dollar Slump Over - Bloomberg

The best currency forecasters say the dollar’s 12 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency.

Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.
While Moody’s Investors Service added to Europe’s woes last week by lowering Portugal’s credit ranking to junk, the dollar is regaining its status as a haven after the worst performance over the past year among 10 developed-market currencies based on Bloomberg Correlation-Weighted Indexes. The dollar is up 5.9 percent from a 17-month low on May 4 against the euro.
Hedge funds and other large speculators are no longer betting the dollar is going to collapse.

Wagers on a decline against peers including the euro, yen and pound were 203,230 on July 5, data from the Commodity Futures Trading Commission in Washington showed last week. That’s down from 405,267 in March, the most since at least November 2003.
Interesting.

That might depend on how you define best. :razz:

Besides, the fact that other currencies are expected to drop faster than the dollar is not necessarily good news. Part of what is actually driving the recovery we are currently seeing is the fact that the dollar is weak, which gives foreign companies a better deal on US manufactured goods. A stronger dollar could lead to a manufacturing slump, which will slow down the economy even further, and might lead to another recession.
 
Again the deceit of how we view the value of our dollar emerges. If our dollar is losing value at a rate of 50% per year, but everyone else is losing value at 60% per year, it would appear our dollar is actually increasing in value at a rate of 10% per year.

If you want to see the truth about the falling dollar, look at inflation numbers (and I don't mean the government manipulated current CPI). Also look at the expansion of the real money supply. As supply increases, price decreases. The price of the dollar is its purchasing power, aka value. More money=lower valued dollar.
 

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