FrancoR 0 #1 December 1, 2006 Can someone with more insight on economics than myself give me some reasons why the US Dollar could become stronger against the Euro in a year or so? I am currently earning and saving Dollars, but the exchange rate does bother me when i take my savings back to germany, it is getting worse and worse and i am only finding reasons for an even weaker dollar. I don't want to waste all the money i make :-) FrancoIf it does not cost anything you are the product. Quote Share this post Link to post Share on other sites
bigway 4 #2 December 1, 2006 the dollar is shit these days. It has just gone from 1.84 to 1.96 against the pound in the last week. I have been following the dollar greatly in the last 12 months against the british pound and the dollar is not the money i would want to be saving. EDIT: was wrong. Just my opinion though. Really looking forward to spending my pounds in thailand in 18 hours .Karnage Krew Gear Store . Quote Share this post Link to post Share on other sites
Frenchy68 0 #3 December 1, 2006 QuoteWith the war in iraq lasting longer than the vietnam war with no end in sight, i can only see the dollar going downhill. China dumping part of its US$ reserve has more influence on the US$ than the war. I wouldn't count on the US$ getting near $1.2 to €1 for quite some time... 1 to 1 will take even longer "For once you have tasted Absinthe you will walk the earth with your eyes turned towards the gutter, for there you have been and there you will long to return." Quote Share this post Link to post Share on other sites
mailin 0 #4 December 1, 2006 Lovely how you can throw this into SC. But how do you figure the iraqi war lasting longer than vietnam??! Quote The Vietnam War is the longest, and arguably the most controversial, in U.S. history. Congress never officially declared war against North Vietnam, but the 88th Congress passed the "Gulf of Tonkin Resolution" which authorized President Lyndon B. Johnson "to take all necessary measures to repel any armed attack against the forces of the United States and to prevent further aggression." The resolution passed on August 7, 1964. The first American ground combat troops landed in South Vietnam (specifically, the U.S. Third Marine Regiment, Third Marine Division, deployed to Vietnam from Okinawa to defend the Da Nang airfield) during March 1965. During the height of U.S. military involvement, December 31, 1968, the breakdown of allied forces were as follows: 536,100 U.S. military personnel, with 30,610 U.S. military having been killed to date; 65,000 Free World Forces personnel; 820,000 South Vietnam Armed Forces (SVNAF) with 88,343 having been killed to date. At the war's end there were approximately 2,200 U.S. missing in action (MIA) or prisoner of war (POW). (SOURCE: Harry G. Summers, Jr. Vietnam War Almanac, Facts on File Publishing, 1985. On May 7, 1975, President Gerald R. Ford officially ended US involvement in Vietnam. Thats 11 years. Where as we invaded Iraq on March 19, 2003, so we're approaching 4 years. JenArianna Frances Quote Share this post Link to post Share on other sites
bigway 4 #5 December 1, 2006 Sorry, I must be mistaken. Something was said on the news here that Bush's war lasted longer than Vietnam. Maybe it was world war two.?? Anyway, i never meant for this to go to speakers corner at all. Though the topic in general should be in speakers cornere.. no? .Karnage Krew Gear Store . Quote Share this post Link to post Share on other sites
bigway 4 #6 December 1, 2006 I must have remembered something wrong aboutt he war comment, big deal though. sorry. I was just trying to answer the guys question with my opinion as someone who deals in US dollar, UK pound and NZ dollar every week. .Karnage Krew Gear Store . Quote Share this post Link to post Share on other sites
SpeedRacer 1 #7 December 1, 2006 Britain is in Iraq as well. WWII went from 1939-1945. 6 years. USA was in it for a little less than 4 years. Speed Racer -------------------------------------------------- Quote Share this post Link to post Share on other sites
bigway 4 #8 December 1, 2006 and again... QuoteI must have remembered something wrong about the war comment, big deal though. sorry. .Karnage Krew Gear Store . Quote Share this post Link to post Share on other sites
Squeak 17 #9 December 1, 2006 QuoteI must have remembered something wrong aboutt he war comment, big deal though. sorry. I was just trying to answer the guys question with my opinion as someone who deals in US dollar, UK pound and NZ dollar every week. You ecen bother to deal in NZ$ Geez dude that's bad, internationaly i only deal in pounds UDS or Euro, I dont even bother with the AUD, and it's marginally better the NZ$You are not now, nor will you ever be, good enough to not die in this sport (Sparky) My Life ROCKS! How's yours doing? Quote Share this post Link to post Share on other sites
bigway 4 #10 December 1, 2006 You are not wrong there but when your family business is property development in New Zealand, you dont usually buy and sell in pounds .Karnage Krew Gear Store . Quote Share this post Link to post Share on other sites
FrancoR 0 #11 December 2, 2006 QuoteQuoteWith the war in iraq lasting longer than the vietnam war with no end in sight, i can only see the dollar going downhill. China dumping part of its US$ reserve has more influence on the US$ than the war. I wouldn't count on the US$ getting near $1.2 to €1 for quite some time... 1 to 1 will take even longer Ok, but will the Americans be able to prevent their currency from loosing value in the long run. Will they ever be able to get a trade surplus, as far as i can remember they have never had that. I just recently read that the amount the US is paying for their credits is higher than foreign inverstments in the US. Americans households all together are supposed to have a negative savings tendency, meaning they spend more than they save. Along with the wish of some oil exporting countries to trade oil in Euros instead of Dollars that does not give me a reason to think the dollar will ever be a strong currency again. What in the world can people still buy in dollars therefore raising the value. Oil ist one thing, American companies is another but products is not because it get's overwelmed by what americans buy elsewhere. Somebody tell me i am mistaken. FrancoIf it does not cost anything you are the product. Quote Share this post Link to post Share on other sites
Frenchy68 0 #12 December 2, 2006 The EU, China and Japan do not necessarily benefit from a weak Dollar. It makes their export goods less competitive compared to US goods. Hence the EU asking the US to help raising the value of the US$. China should soon start feeling the downfall of a week US$ in terms of exportation, and do something about it. And the fact that the CN¥ is somewhat pegged to the US$ is unlikely to change as long as the US$ is getting weaker... "For once you have tasted Absinthe you will walk the earth with your eyes turned towards the gutter, for there you have been and there you will long to return." Quote Share this post Link to post Share on other sites
rmsmith 1 #13 December 2, 2006 "Can someone with more insight on economics than myself give me some reasons why the US Dollar could become stronger against the Euro in a year or so?" The global housing bubble is losing air right now, and in the 2nd-Qtr-2007 roughly $1-trillion dollars worth of Option ARM and HELOC mortgages are due to reset in the U.S., and lower interest rates would ease the pain. However, the FED needs to raise interest rates to rescue the dollar, but doing so will finish off over extended borrowers, and slow economic growth. FWIW, and to answer your question, I'm betting on the FED to save the dollar rather than consumers who can't manage their financial affairs. It's a "damned if you do, damned if you don't" showdown. Quote Share this post Link to post Share on other sites
JohnMitchell 16 #14 December 2, 2006 Reasons why the dollar should be stronger than the Euro? Can't think of any. Wish it was. I want to visit Europe some more, esp. Italy and France, but the exchange rate sucks. Thanks, George. Quote Share this post Link to post Share on other sites
wingnut 0 #15 December 2, 2006 QuoteChina dumping part of its US$ reserve has more influence on the US$ than the war. I wouldn't count on the US$ getting near $1.2 to €1 for quite some time... 1 to 1 will take even longer my econ proffesor was just talking about that in class the other day....... how the dollar is going to depriciate compared to other currencies becasue of this.... ______________________________________ "i have no reader's digest version" Quote Share this post Link to post Share on other sites
Newbie 0 #16 December 3, 2006 Quote"Can someone with more insight on economics than myself give me some reasons why the US Dollar could become stronger against the Euro in a year or so?" The global housing bubble is losing air right now, and in the 2nd-Qtr-2007 roughly $1-trillion dollars worth of Option ARM and HELOC mortgages are due to reset in the U.S., and lower interest rates would ease the pain. However, the FED needs to raise interest rates to rescue the dollar, but doing so will finish off over extended borrowers, and slow economic growth. FWIW, and to answer your question, I'm betting on the FED to save the dollar rather than consumers who can't manage their financial affairs. It's a "damned if you do, damned if you don't" showdown. Interest rate rises, won't make significant difference to the dollar slide - currently the dollar is falling in value against central banks who have both a higher AND lower base rate than what the Fed has set. It has been predicted for several months that the dollar was due for a slide - an unsustainbly high US current account deficit as well as a paradigm shift from other central bank reserves away from the dollar - it has just taken a while in getting here. Now it is being bolstered by weaker housing, and general economic data coming out of the US. Expect even more weakness as UK and Euro firms repatriate their dollar earnings back into their home currency as we move to the end of the year. I would be surprised if we didn't breach $2 to the £ a things stand. "Skydiving is a door" Happythoughts Quote Share this post Link to post Share on other sites
FrancoR 0 #17 December 4, 2006 Ok, so that everything points to a weaker dollar except competitive prices of US good abroad. Can anyone tell me why the dollar will not be just another one of the worlds currencies in a few years and not THE DOLLAR. I think i will chose the waste the money strategy. FrancoIf it does not cost anything you are the product. Quote Share this post Link to post Share on other sites
bob.dino 1 #18 December 4, 2006 QuoteOk, so that everything points to a weaker dollar except competitive prices of US good abroad. Can anyone tell me why the dollar will not be just another one of the worlds currencies in a few years and not THE DOLLAR. 1- Most countries hold most of their foreign currency reserves in USD. 2- The global FX market will not function without the USD - it's the primary cross currency, and it's by far the most liquid. 3- Risk in the FX market is marked from USD Treasury bonds - they're the lowest-risk financial instruments available. 4- The USA is the largest trading partner and consumer of goods for many nations. 5- Currently, the USD is the only currency you can use to buy oil. Some, or most of these may change, but as it stands, no-one can afford a crash in the USD. Quote Share this post Link to post Share on other sites
FrancoR 0 #19 December 5, 2006 Quote 1- Most countries hold most of their foreign currency reserves in USD. 2- The global FX market will not function without the USD - it's the primary cross currency, and it's by far the most liquid. 3- Risk in the FX market is marked from USD Treasury bonds - they're the lowest-risk financial instruments available. 4- The USA is the largest trading partner and consumer of goods for many nations. 5- Currently, the USD is the only currency you can use to buy oil. Some, or most of these may change, but as it stands, no-one can afford a crash in the USD. Thanks. I think 1 is allready changing, 5 will change at least partly, 4 is true but that only has an effect if the US can pay for what it buys and i don't see how the US will be able to do that. Who determines how much risk US treasury bonds are? Is that based on experience in the past? On #2 i don't understand how the liquidity will effect the value of the USD. Does anybody have an idea how high the FEDs interest rates are compared to the past? How big is the influence of the future president, could the dollar be stronger with a democratic president? Thanks for all the input so far. FrancoIf it does not cost anything you are the product. Quote Share this post Link to post Share on other sites
wingnut 0 #20 December 7, 2006 QuoteDoes anybody have an idea how high the FEDs interest rates are compared to the past? very low right now compared to the past.. as in 20 years ago..... ______________________________________ "i have no reader's digest version" Quote Share this post Link to post Share on other sites
kallend 2,182 #21 December 7, 2006 Every forecast I've seen is that the $US will become weaker.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
NCclimber 0 #22 December 7, 2006 QuoteCan someone with more insight on economics than myself give me some reasons why the US Dollar could become stronger against the Euro in a year or so? Markets have a natural tendency to revert to the mean. On a more helpful note, you might consider investing in German companies... or even German bonds. I don't know how much money you're talking about, but if it's worth the effort, you should look into it. Quote Share this post Link to post Share on other sites
philh 0 #23 December 7, 2006 actually makrets follow a path known as a Markov process, what the says in simple English is that markets move randomly with respect to their previous price. This is not the same as moving randomly. This implies the markets do not revert to mean. In fact its not clear that such a statement can ever be meaningful as its arbitrary as to what data you would use to calculate the mean: 1 week, 1 year 1 decade? Ii you want to know where the usd will be in the future you should simply lookat the forward price. This price is not a predicter of the future value its a calculation based upon interest differentials. However research has shown its the best unbiased predicter of the future spot rate. It doesnt mean its alwasy right but it has the least squared errors. Quote Share this post Link to post Share on other sites
