US Dollar is a buy

Quote from scriabinop23:

thats a pretty lousy place to tie up funds if you want to go long the dollar - not even optionable, and probably has high mgmt fees. just sell some AUD, CAD, and EUR in forex.
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Fund Ticker UUP
CUSIP # 73936D107
ISIN US73936D1072

Intraday NAV UUP.IV
Index Ticker USDUPX
Management Fee 0.50%
Est. Futures Brokerage Fee 0.05%
Marginable Yes
Short Selling Yes
Options Yes
Exchange AMEX
Inception Date 2/20/2007

.55 is not so bad....I would rather pay that in a cash account then have to worry about the ridiculous leverage of spotFX.
 
Quote from indahook:

Fund Ticker UUP
CUSIP # 73936D107
ISIN US73936D1072

Intraday NAV UUP.IV
Index Ticker USDUPX
Management Fee 0.50%
Est. Futures Brokerage Fee 0.05%
Marginable Yes
Short Selling Yes
Options Yes
Exchange AMEX
Inception Date 2/20/2007

.55 is not so bad....I would rather pay that in a cash account then have to worry about the ridiculous leverage of spotFX.
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any idea if it spins an avg yield off ? (since short jpy, chf, eur components should give some positive carry, maybe enough to offset aud and other higher interest currencies)

Just seems like a lousy place to park cash. You can go zero leverage on FX anyway.
 
This article also see the usd as a buy but in the coming future.

However like a trader should they are waiting until the market shows the trend is reversing before beginning to take a position. Notice how it is made clear that right now the USD is in a strong downtrend and there is no way he will stand in the way of that but rather wait until the charts show different.
 
-50bp "shock n' awe" is a possibility again.. broker/dealers, financials, homebuilders all in dire straits and laying off heavily. general economy doesn't need right now but the banks surely do. Fed always seems to serve wall street before main street.. Dollar chart not a buy quite yet imo...
 
Quote from Comanche:

Playing contrarian for this weeks FED, it would appear that a rate cut has already been priced in to the broad markets. A 25 bp cut will prob not get you much more dollar downside as everone and their dog is short the dollar.
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I am not sure. What's the formula for interest rate parity? Maybe I am not doing it quite right, but here is what I figured:

1. Right after the last cut on Sep 18, the EUR.USD settled at around 1.3975

2. If the Fed cuts another 25bps, that would represent a 4.762% drop in discount rate (from 5.25% to 5%)

3. Assuming that everything else stays the same, shouldn't we expect the Euro to go up by the same percentage? That is, 1.3975 * 1.04762 = 1.4640

4. Right now EUR.USD is 1.4425. That is, there is another 215 pips to catch on the upside.

If anyone sees a flaw in this calculations, I'd love to know where it is.
 
I don't think this is a linear equation in my opinion. there is a lopsided spec position against the dollar right now with plenty of front running on the expected 25 cut. you equation may work out with a 50 cut, but most here don't think that is in play.

Quote from nonlinear5:



I am not sure. What's the formula for interest rate parity? Maybe I am not doing it quite right, but here is what I figured:

1. Right after the last cut on Sep 18, the EUR.USD settled at around 1.3975

2. If the Fed cuts another 25bps, that would represent a 4.762% drop in discount rate (from 5.25% to 5%)

3. Assuming that everything else stays the same, shouldn't we expect the Euro to go up by the same percentage? That is, 1.3975 * 1.04762 = 1.4640

4. Right now EUR.USD is 1.4425. That is, there is another 215 pips to catch on the upside.

If anyone sees a flaw in this calculations, I'd love to know where it is.
More...
 
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