USD 02 (Oct 09 - Sep 10)

[winston]

Why the Dollar’s Rebound Will Be Short-Lived By Jason Simpkins, Money Morning

The dollar yesterday (Thursday) rallied from 14-month low against the euro, but that rally will be short-lived as U.S. monetary policy is likely to remain loose, even as other central banks raise interest rates.

A recovery of investor risk appetite has slammed the dollar in recent months, driving the currency to a rate of $1.5017 against euro on Wednesday, compared with $1.25 in March. But yesterday, analyst d**k Bove’s downgraded outlook for Wells Fargo & Co. (NYSE: WFC) and China’s less-than-stellar third-quarter growth spurred a greenback recovery.

http://www.moneymorning.com/2009/10/23/ ... r-rebound/

[winston]

Schiff: Get Out of the U.S. Dollar
Schiff calls out the Fed, recommends buying foreign stocks.

They don’t wanna face the pain, they don’t want to deal with reality. If they can’t deal with it now, what makes us think they can deal with twice the pain in the future?


http://www.bearishnews.com/post/2525

[winston]

The Dethroning of the U.S. Dollar Will Happen Sooner Than You Think
By Keith Fitz-Gerald, Money Morning

By now virtually every investor has heard the argument that the U.S. dollar is slated to lose its status as the global reserve currency. And that’s good – as far as it goes.

What’s bad is that many of these investors have yet to latch onto the fact that this could happen much sooner than many people realize and in a manner that will catch most by surprise.

Let’s take a look at the three key reasons that this shift away from the U.S. dollar happening – and sooner rather than later:

1. The Asian Region Currency Partnership:
2. When “Black Gold” is No Longer Quoted in Greenbacks:
3. U.S. Firms Are Already Adopting a China Focus:

http://www.moneymorning.com/2009/10/27/ ... he-dollar/

[kennynah]

not to mention, that favourite Rogers touting the demise of USD.....

[winston]

View of the Day: Don’t write off the dollar By Donald Rissmiller
Published: October 29 2009

The bear case for the dollar may be well-known, but there are a number of reasons why it seems too early to bet on a collapse in the US currency in 2010, says Donald Rissmiller, chief economist at Strategas Research.

First, he says, as long as floors remain in housing and consumer confidence, the US economic recovery is sustainable. “Confidence eased slightly in October but remains above its recent low,” he notes.

Second, he believes the saving/investment equation is not yet sufficiently imbalanced to suggest a dollar crisis is imminent.

Furthermore, the debt-to-GDP ratio remains below the 100 per cent level typically considered problematic. “While there has been some talk of an eventual US debt downgrade, the timeframe still appears to be several years away.”

Mr Rissmiller also argues the Federal Reserve will raise interest rates, while employing tools such as paying interest on reserves, leaving its balance sheet elevated. “There’s a lot of room for tighter US monetary policy before policy becomes ‘tight’,” he says.

Also, foreign central banks could intervene in support of the dollar, given the global push for exports as a solution to the economic downturn.

Finally, pegged and semi-pegged currency countries, such as China, have little incentive to disrupt the current trade system. “Without inflation in developing Asia, there’s little need to make drastic changes now,” he says.

http://www.ft.com/cms/s/0/1560ae5e-c4a1 ... ab49a.html

[winston]

With almost every newsletter asking you to be careful about a dollar reversal due to short covering, perhaps the right move is to be a contrarian and to short the dollar

===========================================

Is the Dollar About the Reverse and Crush Stocks?

Long-time readers know that I’ve begun to develop a love/hate relationship with the US Dollar. On one hand I believe the US currency is horribly flawed given our unserviceable debt load and the Fed’s profligate spending.

However, on the other hand, to make money investing you have to be willing to go against the crowd. And with less than 3% of investors currently bullish on the US Dollar, the contrarian in me can’t help but wonder if we have the makings of a serious Dollar rally similar to the one that kicked off the 2008 Crash in stocks.

http://www.thetradingreport.com/2009/11 ... sh-stocks/

[winston]

Marc Faber expects USD to appreciate 10%

viewtopic.php?f=42&t=583&p=67638#p67638

[kennynah]

10% is a lot man... so, he not friend with rogers hor?

[millionairemind]

10% is a lot man... so, he not friend with rogers hor?

This would probably unwind a lot of USD carry trade... and global equities will have only one direction to go when that happens..

[LenaHuat]

I think Roubini's "USD Carry trade" is not identical to the "Yen Carry trade".
They should not be spoken in the same breadth.
Actually it is not shorting the USD. Roubini's reference is more similar to what caused the Asian Financial Crisis - the Thais, Indonesians and Koreans were borrowing mountains of USD because there was relative stability of their pegs to USD and low USD interest rate. USD-denominated debt is many times bigger than Yen.

IMHO, Roubini's argument makes sense.