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“Seismic change” is under way which may lead to 20% surge in USD
worldtraveller
Posts: 14,012 Forumite
David Bloom, currency chief at HSBC, said a “seismic change” is under way and may lead to a 20% surge in the dollar over a 12-month span.
“We are only at the early stages of a dollar bull run. The current rally is unlike any we have seen before. The greatest danger for markets and forecasters is that they fail to adjust their behaviour to fully reflect a very different world,” he said.
Hans Redeker, from Morgan Stanley, said the dollar rally is almost unstoppable at this stage........ “We think this will be a four to five-year bull-market in the dollar. The whole exchange system is seeking a new equilibrium,” he said. “We think the euro will reach $1.12 to the dollar by next year and will be even weaker than the yen in the race to the bottom.”
The Telegraph
This could be especially highlighted with the UK elections next year looking tight, so I would expect to see a lot of hedging and volatility in cable, as currencies, of course, don't like political uncertainty.
“We are only at the early stages of a dollar bull run. The current rally is unlike any we have seen before. The greatest danger for markets and forecasters is that they fail to adjust their behaviour to fully reflect a very different world,” he said.
Hans Redeker, from Morgan Stanley, said the dollar rally is almost unstoppable at this stage........ “We think this will be a four to five-year bull-market in the dollar. The whole exchange system is seeking a new equilibrium,” he said. “We think the euro will reach $1.12 to the dollar by next year and will be even weaker than the yen in the race to the bottom.”
The Telegraph
This could be especially highlighted with the UK elections next year looking tight, so I would expect to see a lot of hedging and volatility in cable, as currencies, of course, don't like political uncertainty.
There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
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And these experts would alert the world to a huge opportunity to make massive amounts of money .................... why would they do that?
It's all utter bull .....Bringing Happiness where there is Gloom!0 -
Fundamentally the value of the currency reflects how much the nation needs the outside world vs how much the outsode world needs the nation.
The recent big shift in this regard is USA NatGas and Oil output going up dramatically while Europe North Sea is in rapid decline.
Shale will mean oil/gas import/export in the USA is $200B a year less in 2015 than it was in 2010. While in Europe the opposite is true. 2015 will see a bigger import bill. The UK alone will see 0.6mbpd less oil production and 40BCM less nat gas = aprpx $35B a year more import bill0 -
Fundamentally the value of the currency reflects how much the nation needs the outside world vs how much the outsode world needs the nation.
The recent big shift in this regard is USA NatGas and Oil output going up dramatically while Europe North Sea is in rapid decline.
Shale will mean oil/gas import/export in the USA is $200B a year less in 2015 than it was in 2010. While in Europe the opposite is true. 2015 will see a bigger import bill. The UK alone will see 0.6mbpd less oil production and 40BCM less nat gas = aprpx $35B a year more import bill
Plus America and even the UK is linked more to globalisation than say France or Japan thanks to industry such as software and films and things like smartphones.
If the rich developed world doubles in size then small tech sale double. Intel apple Microsoft facebook google GE etc all make a lot more money. likewise more rich people equals more English film and media exports while Japan film exports stay at close to zero.
Total net exports and currency flow is geared more towards the UK and the USA than other large developed countries like Japan/Germany/France/Italy etc. So aa the world gets richer and develops more the USA and UK should pull ahead somewhat from other developed nations0 -
Plus America and even the UK is linked more to globalisation than say France or Japan thanks to industry such as software and films and things like smartphones.
If the rich developed world doubles in size then small tech sale double. Intel apple Microsoft facebook google GE etc all make a lot more money. likewise more rich people equals more English film and media exports while Japan film exports stay at close to zero.
Total net exports and currency flow is geared more towards the UK and the USA than other large developed countries like Japan/Germany/France/Italy etc. So aa the world gets richer and develops more the USA and UK should pull ahead somewhat from other developed nations
Dont think so..
Where are smartphones and most other "small tech" made? They are increasingly designed there as well.
Plenty of things are made in Europe for world export - German cars for example.
Look at export figures US: $1.58T, Germany:$1.3T, Japan $697B, France: $567B, UK:$434B (film industry exports $1.7B)0 -
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Thrugelmir wrote: »China has been acquiring technology for over 2 decades now. Over time dependence on Western exports will diminish.
Complacency is a root cause of the fall of many Empires.
Agree - the argument was against the view that the US and UK were in a better position than other currently developed countries.0 -
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The USD has probably been undervalued for the last decade, whilst the EUR certainly, and the JPY slightly less so overvalued with regard to fundamentals.
Where this would leave GBP is open to debate, but I would think it will be dragged higher with the USD.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
The general drift downwards of GBP against USD seems to be continuing, and is currently USD1.5680 = GBP 1.00. It's now back to the level it was just over a year ago, having peaked at around 1.72 in July this year, which was a 5 year high.There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0
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Total net exports and currency flow is geared more towards the UK and the USA than other large developed countries like Japan/Germany/France/Italy etc.
When more exports (from eg China, Germany, Japan, France, Italy, Spain etc) go to the UK and the USA than the other way around, then that causes a currency flow in the opposite direction.
If the European Central Bank continues its QE programme, while the Fed slows or stops it the Euro, which half a generation ago was trading at 85 Dollar cents only, may well drop to the $1.12 forecast by Hans Redeker of Morgan Stanley. In many ways that would be very good for Alstholm, Airbus, PSA, Enel, Total, Fiat-Chrysler, BASF, Siemens, etc pp.0
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