MoneyTec.com Traders Community Forum - View Single Post - End of dollar's latest rally. 10 Feb 2005

Smurf1976 · 16-02-2005, 05:07

Both bearish on AUD and bullish on USD for the moment.

It is my view that at some point during 2005 USD will surprise to the upside an reach 90 - 100 on the USD index. I think that the AUD will fall regardless of what USD does since the fundamentals absolutely stink once you look beneth the surface of the commodities bull. Australia's current account deficit makes the US trade situation look like nothing to be at all concerned about in comparisson (though there is still plenty to be concerned about).

Long term I am not keen at all on USD but if it really does tank and looses world reserve currency status then that would be associated with the decline of the US itself. Such are the massive benefits of issuing the world's reserve currency.

There is EVERYTHING to lose for the US if the Dollar goes down completely. I just can't believe that it would be allowed to sink completely without a truly massive fight.

The situation came too close late 2004. USD bears everywhere. Even on popular non-financial TV programs. At that point there was a choice - the USD and with it the USA and the world economy goes down or something is done. With talk of central banks dumping USD, the time had come to face reality.

My bet is that central banks "do something" as the world is not, yet, ready to see the demise of the US. Hence I expect a decent attempt, which will be successful for now, to "save" the USD. Thus my expectation for a decent rally during 2005.

Timing. I am not at all convinced that we are seeing the start of this rally at present although it is possible. AUD is, in my opinion, still rising for the moment and USD is falling once again. I would not be at all surprised to see USD Index bottom around 78 this year and AUD top around 82 - 84 us cents.

Of course I could be completely wrong. I always take positions according to the evidence available rather than personal opinion. It just seems to me that there is too much to lose if the USD goes down whilst AUD stands out as being on borrowed time. As I said, I could be wrong.

At present I am long AUD / short USD but will reverse when the technical market evidence suggests that the time has come. I expect this to be within a few months. Note that I take long term positions only and do not day or swing trade, hence my longer term focus on underlying trends.

16-02-2005, 05:07	#6 (permalink)
Smurf1976 level 1 Join Date: Feb 2005 Posts: 30 Rep Power: 4	Re: End of dollar's latest rally. 10 Feb 2005 Both bearish on AUD and bullish on USD for the moment. It is my view that at some point during 2005 USD will surprise to the upside an reach 90 - 100 on the USD index. I think that the AUD will fall regardless of what USD does since the fundamentals absolutely stink once you look beneth the surface of the commodities bull. Australia's current account deficit makes the US trade situation look like nothing to be at all concerned about in comparisson (though there is still plenty to be concerned about). Long term I am not keen at all on USD but if it really does tank and looses world reserve currency status then that would be associated with the decline of the US itself. Such are the massive benefits of issuing the world's reserve currency. There is EVERYTHING to lose for the US if the Dollar goes down completely. I just can't believe that it would be allowed to sink completely without a truly massive fight. The situation came too close late 2004. USD bears everywhere. Even on popular non-financial TV programs. At that point there was a choice - the USD and with it the USA and the world economy goes down or something is done. With talk of central banks dumping USD, the time had come to face reality. My bet is that central banks "do something" as the world is not, yet, ready to see the demise of the US. Hence I expect a decent attempt, which will be successful for now, to "save" the USD. Thus my expectation for a decent rally during 2005. Timing. I am not at all convinced that we are seeing the start of this rally at present although it is possible. AUD is, in my opinion, still rising for the moment and USD is falling once again. I would not be at all surprised to see USD Index bottom around 78 this year and AUD top around 82 - 84 us cents. Of course I could be completely wrong. I always take positions according to the evidence available rather than personal opinion. It just seems to me that there is too much to lose if the USD goes down whilst AUD stands out as being on borrowed time. As I said, I could be wrong. At present I am long AUD / short USD but will reverse when the technical market evidence suggests that the time has come. I expect this to be within a few months. Note that I take long term positions only and do not day or swing trade, hence my longer term focus on underlying trends.