When to Buy Dollar

az2wp0sye65487

This is more a personal question about travelling to the states for a holiday eraly next year. I notice there was a better exchange rate around April/May...

The rate is not great at all now.

Does the value of the Dollar look set to rise or fall against the Euro in the coming months?

Thanks.

daveyjoe

Eric Plain Incense wrote: »

This is more a personal question about travelling to the states for a holiday eraly next year. I notice there was a better exchange rate around April/May...

The rate is not great at all now.

Does the value of the Dollar look set to rise or fall against the Euro in the coming months?

Thanks.

This is pure speculation of course but I would expect the value of the dollar to fall over the next few months (particularly if the $700bn bailout gets passed). I would hold off buying dollars for the time being.

Idu

Dollar to continue to strengthen especially if the $700b bail out goes through for at least the next month. Then it depends on who blinks first and cuts their interest rate. Good article here about it:
http://www.bloomberg.com/apps/news?pid=20601083&sid=aEuxn2ZWriq4&refer=currency

daveyjoe

Two opposing views here both are speculation but here's my logic.

If the $700bn bailout goes through then the fed will have to print the money which is only going to increase inflation of the dollar, thus weakening it's purchasing power ergo a lower value for the dollar.

A bit simplistic but that's how I see it. I think we're going to see hyper-inflation in the states next year

Roonbox

Dont buy the dollar ever!!! seriously

Idu

Roonbox wrote: »

Dont buy the dollar ever!!! seriously

Thats a ridiculous statement

Roonbox

Unless your trading short term bounces in the dollar, otherwise it is not a buy for a very long time.

Idu

Ever I believe is the phrase you used!

Either way your thinking is flawed. From the NY Times:

Since the last great global crisis more than 60 years ago displaced the pound sterling as the world’s reserve currency, the United States dollar has served as the monetary hegemony. Despite America’s withdrawal from the gold standard and subsequent currency devaluations, the dollar has maintained its leadership position for four specific reasons.
First, it remains the only currency to offer enough liquidity and political stability to its owners. Second, influential trading partners like Japan and Saudi Arabia would not casually abandon their security relationship with the United States simply to diversify even out of a declining dollar. Third, the world sees no near-term pretender to the throne because neither the divergent economies within the Euro zone nor the undemocratic Chinese regime command sufficient confidence in their respective currencies. Finally, while the creation of a currency basket may address the above concerns, most bankers view such a vehicle as difficult to manage and administer.

Roonbox

That article is more flawed than me saying never to buy the American dollar. Ill change my statement since Im being scrutinized, the dollar wont be a buy for least one generation.
The dollar will continue to drop over the coming years.
It will lose its place as the worlds reserve currency.
Its being debased on an almighty scale to the point of becoming worthless.

MrLNB

Roonbox wrote: »

Dont buy the dollar ever!!! seriously

you have missed the point, he is going on vacation to the US, like myself. I am heading in Dec for honeymoon. I am holding off on buy $ yet.

Idu

Dollar is only gonna get stronger against the euro this year anyway. Until this financial mess is sorted look for the dollar to stay strong

daveyjoe

I agree with Roonbox on this one. Currencies are a risky investment in the first place. The Dollar will lose its reverve currency privilege unless they do something drastic and this means stop printing money for a while, stop gathering debt for a while and hitting the recession head on, which simply wont happen under current political conditions.

You'll probably be ok this year but by the end of 2010 expect hyper inflation and a dollar that is worth a fraction of its current value. I expect that the euro will also be hit so that doesn't neccesarily mean that the dollar will be a fraction of the euro.