User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday October 28, 2004 - 22:51:11 GMT
Foreign Exchange Analytics - www.fxa.com

Share This Story:
| | Email

Forex: Sell Dollars Or Get Out Of The Way

Sell Dollars Or Get Out Of The Way

First of all this is not about me. What do I mean? I mean my being bearish on the dollar is a view...impersonal. It is the preponderance of evidence for selling dollars and not some attempt at aggrandizement that motivates my take on the dollar.

The price action today speaks volumes. Most importantly the rate hike by China today that sent A$ and C$ down sharply vs. US$ given the implications for commodity prices (of slowing Chinese demand), did not last long at all, even though the initial pain was severe. Moreover, the dollar generally reversed most of the gains on the rate hike (as did bonds with losses). Sure there was good reason to question the impact the rate hike would have given the infancy of the Chinese banking system and the government's well known intent to slow growth to around 7% from around 9% currently. China growing at 7% is not lights out for commodity prices, surely. Nevertheless, the fact that arguably positive dollar news is quickly chewed up and spit out by the market is the type of reaction one expects early in a move.

Secondly, the balance of remarks from senior monetary officials in the Euro Zone and US suggests the concern over the euro rise expressed by German Chancellor Schroeder and the EU's Almunia earlier this week are not widely shared. While unnamed, several Euro Zone monetary officials today played down the significance of the pace and level of the recent euro appreciation (versus the dollar). One official said the higher euro probably delays a rate hike as it implies tighter monetary conditions. And the conditions for joint intervention, preferred by ECB officials when considering intervention, were not in place. Furthermore, the rise in the euro was noted as a welcome check on higher oil prices. Meanwhile with the dollar also weakening versus the yen and hence the euro not the shouldering the bulk of the burden of trade adjustment as Japan is not actively preventing the yen from strengthening, surely the Euro Zone tolerance for a weaker dollar and stronger euro is enhanced...it is not losing competitiveness vis a vis Japan the way it was earlier this year when Trichet called the rise in the euro to near 1.29 brutal. And, even US Treasury Under Secretary Taylor called the recent dollar moves orderly. Rest assured no one in the Bush administration is losing sleep over the declining dollar...not with this employment record and not with the election just a few days away. Japan's economy too is arguably closer to a sustainable growth path than in a decade and more insulated from a yen-related downturn than it was earlier this year. The bottom line here is currency intervention is not imminent. Japan surely will be most inclined to act first. But even when it shows its hand in FX (say on a break of 105 in dlr/yen...the consensus view), the aim will be smoothing, not preventing, yen appreciation. And where is the ECB likely to intervene in euro/dollar? Probably well north of 1.35, and much will depend on the pace of appreciation, where oil is and the willingness of the US to participate (low for Kerry and Bush). Indeed it is difficult to see the US intervening in euro/dollar short of a disorderly move where asset prices are being impacted. From the official side verbal intervention is about all one should encounter selling dollars for the period ahead.

Thirdly, the headwind the US economy is facing is fierce even if oil settles at $48 as opposed to $55. Corporate profits are at risk as oil will shrink margins and firms lack pricing power. Household spending is also pressured by the oil tax as demand is inelastic and incomes are not rising nearly as ast to keep pace with higher fixed expenses. Yes this condition holds for all net oil importers. But if your currency is rising versus the dollar, the hit from higher oil is not as severe. Additionally the US current account imbalance is in the banana republic zone (as share of GDP nearly 6%) and any serious threat to the global economy may make funding this gap that much harder. And the US election next Tuesday could make the 2000 court-decided election look like a picnic compared with this year's election if the polls are accurate and the losing side unleashes teams of lawyers to challenge vote counts in swing states (some suits already filed). A court-challenged outcome next week would be a vote of no-confidence in the US political system and would have seismic consequences for US markets and the dollar and conceivably could force the Fed to hit the pause button November10.

Eliot Spitzer may not be a stand-alone reason for dumping dollars, but his work at exposing corporate malfeasance is a work in progress. Insurance this month, telecommunications next. Spitzer intends to leave no stone unturned. With Spitzer riding roughshod over corporate America, the notion of risk in being long US assets (namely equity and corporate debt) is at the very least worthy of questioning.

Finally, funds are tip toeing into this move down in the dollar which I believe provides a healthier basis for shorts...extending the downtrend. Real money has not gotten very involved either. If it does, the move could easily go another 10-15% by year-end.

So it is time to sell dollars or get out of the way. Some recently have asked if there is anything constructive too say about the dollar (why it may go higher). My answer was the best scenario for the dollar is that the US continues to attract enough foreign savings to keep the dollar stable. This will take turning a blind eye to the preponderance of evidence and being content with the notion hat all one needs for a stable to strong dollar is for the US to outgrow Japan and Europe. Well guess what? This is unsustainable and believing it is sustainable only makes the day it is not far more devastating.

David Gilmore
FXA
www.fxa.com

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 20 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales


Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: High Fri-- 12:30 GMT CA- Retail Sales and CPI. Top economic indicators.


  • POTENTIAL PRICE RISK: HIGH Fri-- 14:00 GMT US- Existing Homes Sales. Top Housing statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105