Any $$ Crystal Ball Experts

mikewilkes

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Anybody care to guess / speculate whatever as to the relative value of the US $ to the Euro and or Sterling by the end of the year???

Have a slight vested interest as my pension is in US $ and would like to sit back and enjoy life. Did show SWMBO where the red light district was but she did not seem overly keen on that one. /forums/images/graemlins/tongue.gif
 

mikewilkes

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Arrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrgh!!!!!!!!!!!!!!!!!!!!!!!

Did not really wish to read that Paul.

Need to go back to the heady days of mid 80's and about 1.10 to the pound!!!
 

gcwhite

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I do quite a lot of $ research and I think we are near the top and the $ should start to strenghten against both the £ & the euro. The reason for this is:

weakening euro economy, Us interest rates, US consumers' ability to spend fuellling reasonible growth.
 

gcwhite

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Serious re investment management. Having said that most forecasting is wrong. If it were always right then we would all have confidence in it, invest accordingly which would influence tha markets the other way and make the forecast wrong. Sometimes contrary investing is the best strategy
 
D

Deleted User YDKXO

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£/€

While you're at it how about a prediction on the £/€ rate for this year. Its a serious question as I do a lot of business in Euros
 

gcwhite

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Re: £/€

You are right it is a cop out but remember this is a forecast. The weather forecasters struggle with a few days and you are asking for August, but ok. My view, and it is my view only, is that the rate will be about 1.75 - 1.80. Anyone acting on this prediction does so at their own risk. I would say, however, that I have put my money where my mouth is and bought $s
 

mikewilkes

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Previous $ ideas.

The best I could get from my banking / f.x. relatives of a very large bank was that by the mid to late 05 things should start to get better. /forums/images/graemlins/wink.gif

There again remember Michael Fish and "the" wind??? /forums/images/graemlins/tongue.gif
 

Trevethan

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Re: £/€

A true economist!

I tend to read a lot of currency related analysis as part of my job (commodity reporter) and the view is mixed.

Some say the dollar decline has arrested, others suggest it has another 20 percent to fall.

I think the big issue is the U.S. economy. Consumption there, bot government and personal is hugely financed by debt, and some people believe that the personal debt market is close to its limit -- i.e. you can't take out any more equity from your home.

This means the economy is very vulnerable to interest rate rises (which is a kery determinant of the value of the dollar against other currencies) So if the U.S> Federal Reserve raised interest rates another 1 percent say -- yes the dollar will recover, but all of a sudden thousands of Americans won't be able to pay off their mortgages and credit cards. and the economy will take a bit of a tumble so the Federal may not be able to increase rates much.

The other problem with the US is the trade gap -- it spends more on imports than exports.

There are a few ways to deal with this. One is to restrict imports. Another way to do that is to make foreign good more expensive by letting your currency devalue -- i.e. takes more dollars to buy your Chinese widget, so you buy fewer or U.S. widgets become more competitive.

At the same time you get more dollars for the stuff you sell abroad.

The latest Reuters Forex poll of 51 currency strategist (Feb 7-9) showed the euro and sterling would renew ascent versus dollar in the months to come, on cencerns of US trade and federal deficits.

Median forecast shows 3 month median $1,32 to teh euro, rising to 1.35 over 6 months and $1.34 for 12 months.

I'd read that in terms of highs in the second/third quarters, trailing off towards the end of the year.
The range in the 12 month forecast is $1.15 to $1.49 --

Finally I don't pretend to have any expertise in these areas and this carries no warranty etc etc etc. Pirely a personal view.

All the best

Nick
 

Gludy

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Re: £/€

Well I have alsp put money were my thoughts are and have contracxted for my new boat in $ because I think it will weaken more .......

Trouble is that I do not know!!! ... but then nobody does.

My won reasoning follows is very close to that described by Trevathan.
 

gjgm

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Re: £/€

if the amount is large enough you could look into buying an option.

re-future direction;there s alot to be said that the markets work in equilibrium. By that I mean that today you can agree an fx rate for a future date. If that price was deemed by the markets to be wrong, the price would move to the believed correct level. So, you can deduce that the forward price today is the worlds best bet is as to where the price will be at that date (less present value discounting).
After that...well, there s no answer out there.
There s an old adage, which in this case is, if you are buying a boat, do that, and stop gambling on the fx markets.
 
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