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Newby

Euro v. US$

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Greetings,

 

I am thinking of buying a flat in Paris. Do you think the Euro will depreciate, compared to the US$, during the next 12 months (I can wait 12 months before buying). I can see:

 

- the US economy recovering sooner than the European economy, but I can also see

- a worse political situation in the US (with the Republicans doing nothing useful, and just trying to annoy Obama) than in Europe, though

- I really don't see how this thing in Ukraine is going to turn out

 

There seems to be some conflicting indications as to the future (1 year) of the Euro-US$. What do you think?

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Hi. welcome, Newby.

 

I good question.

My quick opinion is; that both will be weak (against gold). But I reckon the USD will be weaker.

 

Now, let's look at the chart for FXE...

 

(Here's the problem: I don't see the low in FXE yet - but the seasonality should soon get more favorable):

 

FXE_zps03a7d0e2.png

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Greetings,

 

I am thinking of buying a flat in Paris. Do you think the Euro will depreciate, compared to the US$, during the next 12 months (I can wait 12 months before buying). I can see:

 

- the US economy recovering sooner than the European economy, but I can also see

- a worse political situation in the US (with the Republicans doing nothing useful, and just trying to annoy Obama) than in Europe, though

- I really don't see how this thing in Ukraine is going to turn out

 

There seems to be some conflicting indications as to the future (1 year) of the Euro-US$. What do you think?

The price of the Euro relative to the dollar is 8% higher than it was during the same month last year. I trade the financial markets and have done so for a number of years (mainly stock index futures). In my experience there is such an expansive and intricate network of complex factors that determine price discovery in the foreign exchange markets, such that those successful in trading the forex markets are a rarified breed indeed. It may interest you to know that there is only really one well known hedge fund that specialises in solely forex markets, John Taylor's FX Concepts, they hit the buffers a number of years ago. If the message isn't clear - forex is not something that one can predict with surety.

 

Volatility, on the other hand, is far more stable when compared to direction.

 

What I'm really saying here is - is a possible ±8% worth a definite 12 months?

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