Here is the latest cover of The Economist magazine. Above it you will see a monthly chart of the US dollar index covering the past 15 years. I last commented on the dollar here.
In the issue before this cover appeared The Economist was beating up on the dollar, urging the OPEC countries to revalue their currencies and diversify away from dollar assets. I think we can classify The Economist as the biggest dollar bear among the media, even more bearish than the New York Times.
This media parlay is worth betting. The US dollar is going much higher from here.
12 comments:
How would you play a bullish dolar here? Shorting euro or gold?
No idea yet but watching you carefully.
Hi Carl,
Other than the media what else points out to a stronger USD? I have a hard time understanding how we can look for a stronger USD and higher rates if FED will really lower rates down to 3% as they say it on the Street?Thanks a lot and keep up the good work.
S
sorry Carl ,perfect timing as usual ..... Dollar DOWN big time today.....
again and again to fade you makes money.... like clockwork
European business is getting crushed by the high Euro and high inflation. Airbus is panicking and wants to offshore production.
The US is much more dynamic, competitive and marketdriven than Europe who is facing a HUGE greying population.
You are right CARL! Stick to your guns!
1 of GOD's servants who lives in Holland
Oh dear, another note from Mr. Anonymous, a trading genius who claims he makes money by fading me.
Ha,Ha,Ha, what a comedian. Naturally, he will not post his fades in real time because he doesn't have the guts to back his opinions with a simple timely comment to this blog, let alone with real money.
My message to all those like Mr. Anonymous who think they can trade by predicting the past: put up or shut up !!!
I am not Mr. Anony,
can you give a response to my question?
Thank you,
Cris
Cris:
I'd rather be long the dollar-yen and short the euro - dollar pairs.
Carl,
How actually you do that - Being long dollar? Is there like a ETF for dollar, or you short the euro ETF?
Sorry for being so naive..
Thanks,
Cris
Cris:
There is a euro-dollar ETF (symbol: FXE) as well as a yen-dollar ETF (symbol FXY) but to be long the dollar you would have to be short both of these.
I personally think it is easier and more transparent to trade currency pairs directly on some electronic platform like Interactive Brokers.
I can give a hundred reasons why the dollar will rally. Those who believe the dollar always drops when the Fed cuts rates are COMPLETELY wrong. The dollar is under a very serious speculative attack as it was in the early 1970s. While the US economy cratered and the stock market with it, the U.S. dollar rose. Not appreciably but it did rise. Those who believe the dollar will fall are looking in the rear view mirror.
Yes, I have been bullish for the last six months and I have been wrong but at some point the speculative attack will break. And, the outcome of that break could be a very violent rise in the dollar that could indeed have serious repercussions for financial institutions playing games of lunacy in their quantitative trading strategies.
BUT, many of the reasons that led will lead the dollar higher, will likely be the same reasons the equity markets will sell off.
Cheers.
Carl,
Very much appreciated your clarification. No IB account so I will have to enjoy from the sideline this rally.
Would you load on Gold ETF though?
Best regards,
Cris
anonomous joe here
there is an etf for being long the dollar
look up the symbol : UUP
it is a proshares long us dollar fund.looks like thin trading and probably many bad ticks in the charts but it has been trading since march 2007
it is worth looking at for the dollar bulls .ive been following it for a while now yet have not made any trades .
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