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by Ashraf Laidi
Posted: Oct 31, 2008 20:40
Comments: 114
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This thread was started in response to the Analytic:

US Dollar Index 14-Year Chart

Daily chart of 14 years of cyclical developments in finance & politics
 
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speculator
Posted Anonymously
15 years ago
Jun 14, 2009 11:35
Source bloomgerg 14th june?

G-8 finance ministers said they will start planning exit strategies for when sustainable growth returns. Its still too soon to roll back budget deficits and bank bailouts, they said after a meeting in Lecce, Italy.

We discussed the need to prepare appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured, the ministers said in a statement yesterday after two days of talks. There are signs of stabilization, though the situation remains uncertain.

Signs the worst slump since World War II is moderating are prompting central bankers and investors to warn that inflation will accelerate if governments dont cut back. U.S. Treasury 10- year note yields last week reached 4 percent for the first time since October.

There is a distinct shift in tone from the G-8, said Eswar Prasad, an economist at the Brookings Institution in Washington. Still, rising interest rates due to concerns about fiscal deficits and prospects of inflation could choke off a nascent recovery.

what implication will the above have on the currency market? could this be dollar positive if exit strategies are being talked about. Or is this some kind of aid to curb interest rate expecations and keep yields and the dollar stable so further quantitative easing is not required.
Matt
Cairns, Australia
Posted Anonymously
15 years ago
Jun 14, 2009 5:03
I enjoyed your presentation. I agree that the Fed is facing very grave problems with trying to keep bond yields down.

There are a few points about the dollar I would like to hear your opinion on...

I believe that the rise in bond yields is due to an inflation premium being placed on interest rates.

And this is why, when the public expects further inflation, Fed increases in reserves are raising, rather than lowering, the rate of interest.

As you stated the Fed is left with two choices, stop monetizing debt or increase their efforts. The market is saying increases in Fed purchasing are leading to an increasing risk of inflation and rising yields. The opposite of what the Fed wants.

When the acceleration of inflationary credit finally stops, the higher interest rate will put a sharp end to the boom in the capital markets, and an inevitable recession liquidate unsound investments of the inflationary boom.

I believe that commodity prices have risen due to inflationary expectations and China stockpiling. However what happens when their reserves are full? It takes years to build additional storage tanks for oil etc.... http://www.fundmymutualfund.com/2009/03/reuters-china-oil-goverment-reserve.html

The currency P/E on the S&P is 120.... I can't imagine paying for stock whose current rate of earning would take 120 years to pay back my original purchase price. http://www.chartoftheday.com/20090522.gif
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 4, 2009 20:35
ChnDrag, i wrote about the inverse HS in gold last month http://www.ashraflaidi.com/articles/golden-chance-from-fx-equity-play.asp

Ashraf
ChnDragun
Vancouver, Canada
Posts: 2
15 years ago
Jun 4, 2009 17:46
Ashraf, I think gold has a nice setup of inverse H&S. what do you think?
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 2, 2009 23:53
Simon, will also need to update the USDX chart on the website. I expect we will reach 72 well before year-end.

Ashraf
simon
gauteng, South Africa
Posts: 23
15 years ago
Jun 2, 2009 23:35
Phew !!!!!!

I was just having a look at the 30 yr USD index chart today..........

Woow ........ early 2008 lows, (all time lows), 70. And today we sit at 80.


It will be really significant it is trades 50-70 range in the future, (there would have to be some resistance on the way down).
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 25, 2009 3:27
apache, it's increasingly becoming apparent that we're heading in a protracted wave of dollar selling into the rest of the year. With the way things are going for US bonds, it's hard to expect a sharp USD rally even during falling equities. I will send notifications when the Workbook is updated.

Ashraf
apache99sg
Singapore, Singapore
Posts: 8
15 years ago
May 24, 2009 11:23
Hi Ashraf,
given that dollar index has gone down severely and the thought that money will flow into commodities, do you foresee that this will be the trend in midterm/long term perspective?

Also, is there a notification whenever you are updating the workbook? We won't know that it has been updated unless you leave a notification. is this correct? thanks!
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 23, 2009 1:52
NN, at what point the US will have end up having to support its currency, will also depend on how painful it is for other countries. I doubt the US could do it all by itself.

Ashraf
NN
Posted Anonymously
15 years ago
May 22, 2009 23:05
I like your interview today, especially when you said that we need to "get real" about the UK losing its AAA rating.
I beleive, in the minds of people, the USA has lost its AAA rating. The problems for the Dollar are going to continue until the US governmet steps in to support its currency, that is when the issue become more of a political issue rather than economic issue.
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