Eur/USD
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OK, in that case, the regression line is not as far off to the upside as I thought, especially if the 2005 EUR/USD downtrend (within the multi-year uptrend) is excluded. However, still doesn't look right to my eye. To help us see that more clearly, here's your chart's portion covering precisely that 50-month time frame:
What I mean is simply this: there's far too much price concentration below the middle line and not enough above it, for it to be a true linear least squares (LLS) regression line. Not sure what TS is up to...
I am still on the sidelines for now.
18:03 EUR/USD: Asian Central Banks Load Up At 1.2530 / Stop EUR Rout] New York
June 13. Well the central bank bids from Europe at 1.2550 may have disappeared,
however Asian central banks were reportedly loading up the truck in the 1.2530s.
Dealers noted that some of the 1.2500 barriers expired this morning at the 10.00
AM NY fix, which also eased some of the pressure on EUR/USD.
18:03 EUR/USD: Asian Central Banks Load Up At 1.2530 / Stop EUR Rout] New York
June 13. Well the central bank bids from Europe at 1.2550 may have disappeared,
however Asian central banks were reportedly loading up the truck in the 1.2530s.
Dealers noted that some of the 1.2500 barriers expired this morning at the 10.00
AM NY fix, which also eased some of the pressure on EUR/USD.
LOL...while your comment had me laughing, I don't think we're headed back to 1.20.
In fact, I'd be surprised if we go much lower at this point. We're going to see another hike by Ben, and then a pause. That's my prediction. And while this pause may not be the end of hikes, it will be enough to get the market thinking "pause" again, and there will go the dollar.
1.20 a complete exaggeration of course... unless oil drops in lockstep and even then, that wld prob drive US Trade Balance to south of -$70bio, therefore bringing the $ back in line on deficit type concerns alone...
re pausing however, whilst i agree a pause is the logical step post-june hike, don't forget that 1) a pause at 5.25% risk-free rate (while EUR 'may' raise by an extra 25bps within the next few months) is not the same as a pause at 4% level, 2) the physionomy of the mkt is very different from 2 days ago, now that tons of retail accts have been burned to death...
other than just the carry trade, what shld boost the $ imo is the simple fact that i wld expect better returns on US domestic assets in general than on any equivalent european asset classes... just a view (from a european passport holder...)
re pausing however, whilst i agree a pause is the logical step post-june hike, don't forget that 1) a pause at 5.25% risk-free rate (while EUR 'may' raise by an extra 25bps within the next few months) is not the same as a pause at 4% level, 2) the physionomy of the mkt is very different from 2 days ago, now that tons of retail accts have been burned to death...
other than just the carry trade, what shld boost the $ imo is the simple fact that i wld expect better returns on US domestic assets in general than on any equivalent european asset classes... just a view (from a european passport holder...)
I think there's serious risk to the dollar as soon as the word "pause" gets back out there. Now, that being said, Fed Futures hike probability is now 100% for June - and they're talking about pricing another hike now. I think the "other hike" is a bit premature at this point. Ben's not stupid (despite armchair QBs here on the forums claiming he is). I think he'll want to pause after this one just to pop his head up and take a look around and see what effect all of these hikes are taking on the economy.
I'm not saying they're done, just that they'll take a break for a month. At that point, it'll become "everyone hates the Dollar" time again, and people will find a whole host of reasons to sell the dollar just because.
I'm not saying they're done, just that they'll take a break for a month. At that point, it'll become "everyone hates the Dollar" time again, and people will find a whole host of reasons to sell the dollar just because.
i don't disagree with that, but EC numbers may disappoint as well, in which case let's see... btw FFF for july etc expiries have all moved 5-7bp on the CPI figure... thats an additional 20-28% prob factored in already... not small! aug FFF already prices in a 40% prob... may not take much...
which tools do you guys use to trade? any recommendations? and why?
thanks!
thanks!
other thing... seems clear there is no (military) urgency in iran, let's say (hope) things get better in iraq, that means an improved budget deficit outlook...
we know the CBs will continue to hike rates even at the expense of a few growth points if oil & commodities don't get back to non-inflationary levels (way more damaging if kicks in for real than a mild recession...)... now there is always the poss of a real nasty hurricane, or two, or terrorist attacks against oil installations etc... that would delay the desired readjustment...
the flat / mildly inverted yield curve is a non-issue, the treasury will be taking care of resteepening http://www.elitetrader.com/vb/showthread.php?s=&postid=1099874#post1099874
next housing figures won't be pretty after whats just happened, but that's just a healthy climbdown of an over-speculative mkt... rather a good thing
now on the basis of the above working assumptions, i.e. essentially, inflation risks will be controlled, growth will decelerate but thats still growth, no major blow-ups in the US, less geopolitical tension leading to a better outlook for the US budget deficit, all other things being equal (hehe) what's the outlook for the $?
well, #1 risk is a serious blow-up / default in china... no enron / worldcom type failures for years in china... if you don't find that strange... http://www.elitetrader.com/vb/showthread.php?s=&postid=1079469#post1079469 http://www.elitetrader.com/vb/showthread.php?s=&postid=1096239#post1096239
with the current slowdown, if growth gets even softer, summer might be a good time for a big fat china crisis... when it happens, commodities plunge, trade with china shrinks etc...
lets say it doesn't... if budget deficit worries abate, $ gets stronger, which in the current environment & with summer round the corner shldn't necessary fuel much if any additional consumption (temporary negative 'wealth' effect due to the recent correction), therefore TB (Trade Balance) may remain in the current range, or even improve... in any case one shld expect NFSP (net foreign securities purchases) inflows to continue / increase markedly, which shows confidence & reinforces $-strength...
up to what point? dunno but i know i can't build an equalling 'compelling' (ahem...) case for EUR appreciation...
just rambling of course ;-) nite all!
we know the CBs will continue to hike rates even at the expense of a few growth points if oil & commodities don't get back to non-inflationary levels (way more damaging if kicks in for real than a mild recession...)... now there is always the poss of a real nasty hurricane, or two, or terrorist attacks against oil installations etc... that would delay the desired readjustment...
the flat / mildly inverted yield curve is a non-issue, the treasury will be taking care of resteepening http://www.elitetrader.com/vb/showthread.php?s=&postid=1099874#post1099874
next housing figures won't be pretty after whats just happened, but that's just a healthy climbdown of an over-speculative mkt... rather a good thing
now on the basis of the above working assumptions, i.e. essentially, inflation risks will be controlled, growth will decelerate but thats still growth, no major blow-ups in the US, less geopolitical tension leading to a better outlook for the US budget deficit, all other things being equal (hehe) what's the outlook for the $?
well, #1 risk is a serious blow-up / default in china... no enron / worldcom type failures for years in china... if you don't find that strange... http://www.elitetrader.com/vb/showthread.php?s=&postid=1079469#post1079469 http://www.elitetrader.com/vb/showthread.php?s=&postid=1096239#post1096239
with the current slowdown, if growth gets even softer, summer might be a good time for a big fat china crisis... when it happens, commodities plunge, trade with china shrinks etc...
lets say it doesn't... if budget deficit worries abate, $ gets stronger, which in the current environment & with summer round the corner shldn't necessary fuel much if any additional consumption (temporary negative 'wealth' effect due to the recent correction), therefore TB (Trade Balance) may remain in the current range, or even improve... in any case one shld expect NFSP (net foreign securities purchases) inflows to continue / increase markedly, which shows confidence & reinforces $-strength...
up to what point? dunno but i know i can't build an equalling 'compelling' (ahem...) case for EUR appreciation...
just rambling of course ;-) nite all!
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