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Posts by "ashraf laidi"
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$640 is a major low, 76% retracement of the low from July 2005. Oil foundation stands at $48-55. Careful from Sterling. 50-bp rate cut this week is assured. talk of a 75-bp move.
Ashraf
Yes, USDX likely to make temporary pullback towards 85 before revisiting 89 and 90, and even 93.
Nice to hear from you. GBP remains more of a short-term bearish play during each intermittent gains. How war more ill it go? It is time for a sharp rebound to as high as $1.75, but I dont think we have seen the lows yet. $1.45-1.46 remains very plausible. More rate cuts ahead by the Bank of England. 50-bps seen this Thursday.
Best
Ashraf
I prefer gold to oil. Im not an expert is oil but id say it could drop as low as $55. $45 is a major low. If you want to speculate in commodities, you're better off doing it in Gold, which i consider better favored than oil. As I said before, within the next 3 months, we should see a major rally in metals.
Ashraf
Ashraf
Ed, short answer is YES, it has more to go. It's about time the selling has tapered off after 11 weeks of steep declines. It's too early in the bear cycle to to pronounce the end of the sell-off. We should soon get the much anticipiated rebound (at least for a week and not a 10% day move) that could lift the major indices by at least 20% before a resumption of the bear and fresh yen bullishness. Bull market rallies have typically lasted for weeks if not months (like between March and May). If one is expecting or hoping for prolonged equity selling to make money by buying yen and dollars, they should want a decent bear market rebound that will herald the next slide.
Ashraf
The 37% drop in 4 months has been astounding. In the short term, looks like we may test 57 in the next 2 weeks. The main thing for Aussie to rally is for Fed to slash rates by 75 or 100 bps next weeks, which is doing the rounds nows. 50 bps may not cut it. The big question is the duration of Aussie 's long term selloff which i think could last until early Q1. Stay tuned.
Ashraf
Your agument is well made. I always thought the UK would be in worst shape than US and Eurozone. As matter of fact, in December of last year, I wrote a piece called "Sterling will be the Dollar of 2008", the same title was then used by a columnists in the FT. As for the Eurozone, the issues among the economies you mentined have always been there and will not derail the euro. My underlying thesis states that the spreading virus of CDOs and CDs is far greater and deeper in the US than in Eurozone. Yes, some Eurozone banks were hurt, but EU households werent as badly hit as their US counterpart because 1) they didnt suffer the same kind of negative home equity 2) their involvement in the stock market isnt as deep as US investors. All of these allow for better prospects for a recovery in consumer demand.
Greece and Spain have their own problems of govt debt and spain is saddled with bad home loans. But the combination of surging US budget deficit as % of GDP outpacing 7% (not 6% as many say) and reduced prospects of foreign financing that debt (especially with foreign purchases of US agencies sinking low) the is a long term negative for the USD and the US economy.
Ashraf
Ashraf