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Old 11-14-2007, 05:12 PM
Zygote Zygote is offline
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Join Date: Jan 2005
Posts: 2,051
Default Re: Back to the well once more...long dollar

Might as well give this trade another run. EUR/USD looks to have formed a double top here. 5 lots from 1.4670.

Looking for the Yen to run tomorrow with US Equities falling hard.

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if anything brings down the eur/usd it will be some political intervention, not a double top.

there may be some retracements but i think you're crazy to go long the dollar versus anything.

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nah, relative interest rate diffs w/ the developing world can definitely converge, increasing demand for the dollar relative to EUR or GBP.

personally, i think the GBP is a better long since the UK economy is very unstable and highly dependent upon record credit driven domestic consumption...further that is based on huuuuuuuuuuuge housing price increases. these are unsustainable and, when the sh*t hits the fan, mervin king will not hold off pulling the trigger on lower rates like he did injecting liquidity into the system or to help save northern rock. he will move rates down more than the US will since the inflation picture is better in the UK than US.

therefore, the USD will increase in value relative to the pound, probably to 1.85 or so.

it is not crazy to go long the dollar vs. anything just because you know the dollar is a weak fundamental currency overall.

that isn't good trading logic at all.

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i'm short GBP/CAD because i agree with your assessment. I just think the USD is far from the optimal currency to be long.

As for the EUR, im short EUR/CHF... not that much though. Most of my long CHF comes from the USD. Overall my portfolio is almost all short the USD though, and has been for a while. Having the dollar long as part of your portfolio is at best a sacrifice of optimality and at worse a disaster IMO.
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