EUR/USD exchange rate

[369]

The US is in a very vulnerable position itself. Highly divided, over extended, has 100T debt... They cannot afford high interest rates. (If they could, why did they had 0 since 2008).


Usually it does not work in such a smooth way, one can look at UK for example and their tough stance to increase rate. They had to intervene massively and hence weakening their currency. This lies ahead.

the simply answer to that is to make it possible to elite could buy all assets via debt and can dump the non important once to the public with high profit.
Debt is not a problem if you understand how the fed works.They could keep going for decades this way.Its a myth that debt is an issue for them


UK is in that position on purpose.I posted for years the two worst countries in this crisis will be #1 UK and #2 Germany and not because of their sitution but because of the agenda for them

 

[Mike Forman]

The US is in a very vulnerable position itself. Highly divided, over extended, has 100T debt... They cannot afford high interest rates. (If they could, why did they had 0 since 2008).


Usually it does not work in such a smooth way, one can look at UK for example and their tough stance to increase rate. They had to intervene massively and hence weakening their currency. This lies ahead.

I do agree the US is in a vulnerable position, the whole world is in a vulnerable position and at present the US is the one that will be least worse off.

Europe has much more to deal with and China is still stuck in its zero covid policy, it's depreciated CNY, real estate bubble, restrictions.

The GBP weakening was a result of the "great* fiscal plan presented by the meanwhile resigned prime Minister Truss.

Inflation will not suddenly drop, and not be soon near target level of 2pct, as the data always comes 2 - 4months afterwards. The Fed also is using statistics that don't really reflect the true situation (unemployment figures). So if we don't see inflation going down to 4pct or rapid increasing unemployment data the fed won't pivot.

We live in an unpredictable environment and the recession still have to come. Meanwhile currencies and equities will rally, backtrack and correct. Some money can be made in these swings, if you are at the right side.

If we all knew the EURUSD direction, we could leverage a few million usd forex and after a week when taking the profits don't care anymore about what direction it goes. So above is my opinion and the probability of the rate increase is based on poll data.

 

[polonieth]

The GBP weakening was a result of the "great* fiscal plan presented by the meanwhile resigned prime Minister Truss.

Do you really think Truss's plan, which paled in comparison to the money spent elsewhere, caused the GBP to weaken?

 

[Larin]

Do you really think Truss's plan, which paled in comparison to the money spent elsewhere, caused the GBP to weaken?

The pound almost reached parity a day or two after her mini-budget was announced. It jump several hundred basis points when she resigned and is now trading at 3 month highs.

It wasn't the money being spent, it was the promise of lower taxes across the board and higher spending that sent everyone running. I don't know what right-wing rock she crawled out of, but she was proposing tax cuts that the people affected by them didn't want.

 

[polonieth]

The pound almost reached parity a day or two after her mini-budget was announced. It jump several hundred basis points when she resigned and is now trading at 3 month highs.

It wasn't the money being spent, it was the promise of lower taxes across the board and higher spending that sent everyone running. I don't know what right-wing rock she crawled out of, but she was proposing tax cuts that the people affected by them didn't want.

It is fantasy to think the mini-budget made any difference here. I suppose it caused the Yen to hit a 40-year-old low vs the dollar too. It was all narrative.

 

[void]

USD getting stronger since FED is quickly raising high interest rates based on 75 points each time.
The current spike is caused (false hope) that the fed is going to pivot on dec 2 which is not going to happen.
If you look in a bigger picture S&P near TOP of downward channel which means USD should soon begin to get stronger again

ok, it's Dec 5 and it looks like this

what's going on?

 

[OffshoreMonero]

It's ok. CBDCs will fix all of this.

We will all own nothing and be happy soon enough. Haha!

 

[backpacker]

ok, it's Dec 5 and it looks like this
View attachment 4308

what's going on?

Euro is considered a "risk-on" asset. Since markets are in a "risk-on" mood, this is the result.

From a fundamental point of view nothing has changed: Over time the Euro will continue to weaken against USD.
It does not help that ever more economic dwarfs are joinng the Eurozone (e.g. Croatia in January 2023). So, at the end an investment into Euro is an investment into an emerging market currency.

 

[JackAlabama]

ok, it's Dec 5 and it looks like this
View attachment 4308

what's going on?

Well the usd is grossly overvalued. Dxy went parabolic since mid21.
Regardless of usd being fundamentally more sound than euro (which i guess everyone will agree to), the trade was/still is crowded af (all grandmas, dogs and even news magazines are long usd) and sharp corrections result at the end of the parabola.

 

[denniz07]

It does not help that ever more economic dwarfs are joinng the Eurozone (e.g. Croatia in January 2023). So, at the end an investment into Euro is an investment into an emerging market currency.

Who knows. My understanding is that the whole currency market is led my manipulations from the central banks. Guess it is the question what FED and what ECB whant. So maybe to strong dollar is not good for US and to weak EUR is not good for EU so they try to correct the exchange rates. I mean from economical perspective, not much have changed in the few months. Maybe only that the fear of not enough gas is gone.

 

[JackAlabama]

Who knows. My understanding is that the whole currency market is led my manipulations from the central banks. Guess it is the question what FED and what ECB whant. So maybe to strong dollar is not good for US and to weak EUR is not good for EU so they try to correct the exchange rates. I mean from economical perspective, not much have changed in the few months. Maybe only that the fear of not enough gas is gone.

us cannot have high interest rate. Who can afford 8% for mortgage and who wants to pay high credit card interest rate.
Also the top economic activity/acctraction of us is their capital market, which is dead in the water without speculative attractiveness.

 

[denniz07]

us cannot have high interest rate

You could say the same for EU. But both also can't afford high inflation rates. Everything over 5 % is in my opnion very bad.

 

[JackAlabama]

You could say the same for EU. But both also can't afford high inflation rates. Everything over 5 % is in my opnion very bad.

In the us these will come down by early next year. Eu seems to top out slowly as well.
Then interest rate cuts will follow as have been the case for so long.

 

[369]

ok, it's Dec 5 and it looks like this
View attachment 4308

what's going on?

i made a mistake with the date.
FOMC meeting was not dec 2 but dec 13-14

us cannot have high interest rate. Who can afford 8% for mortgage and who wants to pay high credit card interest rate.
Also the top economic activity/acctraction of us is their capital market, which is dead in the water without speculative attractiveness.

who says the fed doesn't want to kill all small and middle class financially ?
You won't own anything and still be happy ?Who's Agenda is it again ?

What you also don't understand is the transformation from an inflation based econemy to a deflation based econemy.

You could say the same for EU. But both also can't afford high inflation rates. Everything over 5 % is in my opnion very bad.

Is it for the rich ones ?
Who are the losers at a high inflation ?

In the us these will come down by early next year. Eu seems to top out slowly as well.
Then interest rate cuts will follow as have been the case for so long.

ROFL.......you must walk with blind eyes......
Russia will stop soon Oil to europe completly and europe will be forced to buy oil from US.
What do you think will happen to the price of limited oil for western countries and what will it cause via inflation ?

 

[void]

What you also don't understand is the transformation from an inflation based econemy to a deflation based econemy.

each surviving economy would be deflationary in the long-term without the state interventions - basically any involuntary regulation has inflationary impact

 

[denniz07]

Is it for the rich ones ?
Who are the losers at a high inflation ?

Sure, also the rich one suffer. I mean ok if you have ton's of debt on a low interest level it is pretty good for you. So some people profit. Wouldn't say they are the rich one, see what happend to stock market.
Also sometimes everyone looses, like if inflation is high just because there is not enough energy. OK your gouverment wins only because they have a lot of debt.

 

[backpacker]

Sure, also the rich one suffer.

The rich ones suffer (?) - are you joking
As a group, they have never suffered from any substantial losses in the last 30 years. This group of very rich and ultra rich people consists of individuals with a fortune of > $50MM.

see what happend to stock market.

What happened to the stock market? Until now exactly nothing. Just some overvalued tech stocks had to give in (and are still extremely overvalued).

Also sometimes everyone looses, like if inflation is high just because there is not enough energy.

A rich person doesn't care about the increase in energy prices. It is irrelevant to him/her since the increase in prices is easily compensated by higher interest rates he/she gets on his wealth.

 

[369]

Sure, also the rich one suffer. I mean ok if you have ton's of debt on a low interest level it is pretty good for you. So some people profit. Wouldn't say they are the rich one, see what happend to stock market.
Also sometimes everyone looses, like if inflation is high just because there is not enough energy. OK your gouverment wins only because they have a lot of debt.

Oh yeah just a coincidence that FED members ,Elon Musk and co sold on market top.
Funny how the rich ones sold a lot of their RE and are shorting.
Like only the dumb crowd thinks you can only make money when the market goes up.
Fortunes are made when the market are moving heavily down.

Also the comment that the US needs to pivot.
Any had a look of history data what happened in the past when the FED pivot ?
I guess you guys will be one of the sheeps who will be cut thinking the pivot will do magic on the stock markets and fundamental data are irrelevant

 

[void]

i made a mistake with the date.
FOMC meeting was not dec 2 but dec 13-14

ok, Dec 15,

 

[void]

the trend doesn't appear to change much - what are your thoughts about the future development?