Charting the Dollar -- Weak outlook

[billythekid245]

Most of the charts for the major currencies pairs (paired with USD) are showing that the dollar will continue to weaken. These next few weeks will be really crucial.

GBP/USD is on a tear. I wouldn't take any position but long. It has legs and is still moving.

USD/CHF: Has reached a key support level coming into a wedge. If it breaks through the floor of 1.1950 or so, should drop like a rock.

USD/JPY: There may be hope for the dollar

Your thoughts...

[Lou]

your a currency trader?

[Thierry Martin]

Should we add a forex section to this forum? I only see the ocassional post, but maybe with a separate section there would be more action.

[Svenwulf]

as a gold bug, currencies are never far from my mind. its the heart of the inflation talk everyone seems so interested in lately. everyone chalks the dow rally to a falling usd (where'd we hear that a year ago?) i will skip the political implications, and just offer an excercise that may confuse some of those "in the know."

a barrel of crude oil is less expensive today then it was 2, 3 or even 5 years ago. ?!?! i must be looking at those charts upside down again, right? i admit the long crude chart looks phenomenal. it is priced in usd. just so we compare apples to apples, gold also is often priced in usd. compute the number of barrels of crude one z of gold would buy, arbitrarily in jan 06. simplified numbers, crude at 61/b, gold 540/z. 8.85 barrels. jan 07, crude at (even excluding panic) 60/b, gold 640/z. 10.67 barrels, eh? oh im cherry picking, i did say "today" which would be 74/b, 665/z, or 8.99 barrels, still cheaper on this relative measure then jan 06. the result is more pronounced over a longer time, and works with almost any commodity relative to oil. so what happened- all those nigerian rebels, all iran's sabre rattling, increased demand from china we hear so much about, and crude is less expensive today? either gold outperformed, which it did not (take a look with crude/vs silver- thats out perform) or crude oil, despite the nominal price increase over the last year, has remained steady or down. now what if i asserted that gold has not changed in value in 2000 years? surely for another time...

this really is a topic for another thread, but it all has to do with why interest rates, currencies, and eventually nations will behave the way they will. maybe thats hyperbole, or perhaps i wear the tinfoil to get better reception. i accept the fact that war is the greatest generator of debt known to man, and if you can keep a nation pacified while it wages a perpetual war, you have a nation which celebrates it's entrance into slavery, financial or otherwise. and here i promised no politics....

and of course, one can not ignore the influence of speculation, both historically and currently. best wishes.

[billythekid245]

Interesting analysis and commentary. I really enjoy hearing people's thoughts on the matter.

Which leads to a Forex forum category...I wouldn't mind it. I do not know if it will get a substantial amount of interest but I will certainly participate.

To answer a previous question: Yes, I am a currency trader. I am with a firm (that will go unnamed) in San Francisco. Most of my interest and skills in technical analysis come from my experience at the firm under a well known technician (Again, unnamed).

[Svenwulf]

with gold and oil at big time highs, i thought id give this thread a bump. for the record, dec gold settled 739.9, crude 81.78, or just over 9 barrels of crude per ounce of gold. the same as 2 months ago?

dont really know where to stick this, but reflation rescues never work. best wishes.

[Albert0373]

The canadian dollar today saw $1.001 USD....

5 Year chart (and other time ranges) comparing the USD to CAD
http://finance.yahoo.com/charts#chart9:symbol=usdcad=x;range=5y;charttype=l ine;crosshair=on;logscale=on;source=undefined


(...finally, I can use those random canadian coins I find)

[madcowdisease]

The canadian dollar today saw $1.001 USD....

5 Year chart (and other time ranges) comparing the USD to CAD
http://finance.yahoo.com/charts#chart9:symbol=usdcad=x;range=5y;charttype=l ine;crosshair=on;logscale=on;source=undefined


(...finally, I can use those random canadian coins I find)

Heard the same thing on Squawk Box this morning. Pretty sad if you ask me and unless Big Ben wakes up we'll be looking at a stronger loon than dollar before long.


My question to you all is...

How will a strong loon affect the stock of Canadian companies?

[cramerica1972]

Heard the same thing on Squawk Box this morning. Pretty sad if you ask me and unless Big Ben wakes up we'll be looking at a stronger loon than dollar before long.


My question to you all is...

How will a strong loon affect the stock of Canadian companies?i said that cutting the rate was a BIG mistake,the dollar is going LOWER b/c of it.we'll be paying for the cut in the way of HIGHER prices.

[JV_Picker]

Heard the same thing on Squawk Box this morning. Pretty sad if you ask me and unless Big Ben wakes up we'll be looking at a stronger loon than dollar before long.


My question to you all is...

How will a strong loon affect the stock of Canadian companies?

Any currency move will magnify any gain or loss, even if the stocks don't move (in loons).

I moved my Roth IRA from a CD to a stock account. Since I wanted the account to grow without much help from me, I picked stocks that pay dividends and earn money in the U.S. and elsewhere, plus one totally foreign play. My picks were GE, IBM, and ARA. All three have gained 0.1% (close to close) since the cut, and 7.6% since purchase at the end of August/beginning of September.

With a less valuable dollar, the rest of the world probably won't feel as inclined to loan money to the U.S. capital markets, but will buy stuff (who'd win: IBM vs. SAP? One guess...) and private company equity from us.

[aiki14]

Any currency move will magnify any gain or loss, even if the stocks don't move (in loons).

I moved my Roth IRA from a CD to a stock account. Since I wanted the account to grow without much help from me, I picked stocks that pay dividends and earn money in the U.S. and elsewhere, plus one totally foreign play. My picks were GE, IBM, and ARA. All three have gained 0.1% (close to close) since the cut, and 7.6% since purchase at the end of August/beginning of September.

With a less valuable dollar, the rest of the world probably won't feel as inclined to loan money to the U.S. capital markets, but will buy stuff (who'd win: IBM vs. SAP? One guess...) and private company equity from us.

Canadian dollar reached par yesterday and is now worth 1.0008 USD. Pretty amazing to those of us who remember it being 70 cents. I have been overweight foreign for a couple years now, and have some currency baskets trading the USD against the Aussie and Kiwi dollars. In the current interest rate environment (falling) the positions are looking pretty solid.

Good move getting out of the CD, you're not making anything in that. I might consider a little more diversity in the stocks. I like NBG a lot these days for an international play that is less correlated to the US markets while still being traded on the NYSE (as opposed to an ADR).

[TonyM]

Interesting that one of the oft complained about things in trading with China is the severely undervalued Yuan and the leverage it provides them. With the dollar increasingly declining perhaps the U.S. can flood the European and Asian markets with cheap goods that get recalled every couple of weeks, and with the ever increasing frequency of natural disasters we might divert steel and concrete from the PRC. Hey, we could become an emerging superpower...again. All we need now is for the PRC to demand that we raise our interest rates, I would literally roll on the floor laughing. Ahh, the irony.

[JV_Picker]

Good move getting out of the CD, you're not making anything in that. I might consider a little more diversity in the stocks. I like NBG a lot these days for an international play that is less correlated to the US markets while still being traded on the NYSE (as opposed to an ADR).

Thanks for the compliment. I opened the Roth a little more than seven years ago when CD rates were comparable to now (5+%), but kind of "forgot" about it and the CD's earnings were slaughtered. For the past month, I've been doing serious financial housecleaning, and the move was a part of that. Not long after I opened the new account, the institution that held the CD account mailed to me an offering of a 5.5% yield on their short-term (less than one year) CDs. I took a look at their current offering, and the've already lowered the yield by 1% over the past month.

Thanks for the stock tip. I glanced at the form 20-F for the group, and NBG looks real good. I'll make further comparisons later during the upcoming week.

[Svenwulf]

With the dollar increasingly declining perhaps the U.S. can flood the European and Asian markets with cheap goods that get recalled every couple of weeks, and with the ever increasing frequency of natural disasters we might divert steel and concrete from the PRC. Hey, we could become an emerging superpower...again.

funny.

regarding the loonie, i heard an interesting idea friday. cananda's economy is mostly exports. exports to the us. this kinda acts as a backstop for the usd- the less our dollars are worth, the less we buy and the less productive their economy. of course this ignores any slack taken up by emerging economies.

[Svenwulf]

a random thought after a few months of interesting discussions-

a weaker usd makes past debt obligations less valuable.

[netwrangler]

a random thought after a few months of interesting discussions-

a weaker usd makes past debt obligations less valuable.Or costly, depending on which side of the debt you are on.