What Could Turn the Dollar Around?

I was on Fox Business earlier this afternoon talking about what could turn the dollar around.

Here is a chart showing how G7/G8 (which is now G20) finance ministers and central bankers meeting has coincided with major tops and bottoms in the EUR/USD. I’ll have more on that soon at FX360.com

15 Comments

  1. A combined effort from many central banks could turn the dollar around. An intervention from a single bank or even two, could only have a limited, temporary effect.

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  2. How about this crazy idea: Have the usa government stop spending and printing money they don’t have. who let those politicians get away with running the usa in the red for decades! how ridiculous. what a scam! what c corp would survive running in the red for decades? none. The usa is a giant c corp and the shareholders are getting bilked

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  3. Billionaire John Paulson Makes Big New Bet on Gold

    “The Wall Street Journal is reporting that one of the best hedge fund managers over the last 2 years is launching a special fund dedicated to buying up shares of gold miners and other gold related investments according to their sources.”

    From The Wall Street Journal – WSJ.com – Published: 19 Nov 2009

    One of the biggest investors is placing a big new bet on gold.

    John Paulson, who scored about $20 billion of profits for his hedge fund between 2007 and early 2009 wagering against the housing market and financial companies, is launching a fund dedicated to buying up shares of gold miners and other bullion-related investments, according to three investors

    Mr. Paulson spoke about the new fund, which will begin on January 1, at a meeting with his investors Tuesday in New York. The gold fund will invest in gold-related shares and gold derivatives and will aim to outperform gold prices.

    Mr. Paulson also has become a big fan of shares of Bank of America Corp. In a letter to his investors, Mr. Paulson said he had a target price for the big bank of $29.81 by the end of 2011, according to an investor

    The letter said he was basing his view on the bank’s recent earnings, not on a projection that profits would surge. He argued that loss provisions would drop and investors would pay a higher price/earnings multiple for Bank of America’s earnings.

    Paulson & Co. already is a major holder of gold shares including AngloGold Ashanti Ltd. and Kinross Gold, doing most of its buying early this year. Mr. Paulson currently has more than 10% of his $30 billion or so under management in gold-related investments, according to his investors

    Mr. Paulson also owns billions of dollars of gold exchange-traded funds and forward contracts that he uses for gold-backed investor classes of his various funds. These gold investments have benefited from the recent surge in gold prices to nearly $1150 an ounce.

    But investing in gold has become a conventional choice for investors worried about the values of leading currencies, including the dollar, on the heels of the huge amounts of money being printed and shoveled at various
    troubled areas of global economies. Gold’s growing popularity raises questions about whether Mr. Paulson’s increased affection for the yellow metal is misguided; the insurance he bought on subprime mortgages was home run for him because it was selling at dirt-cheap prices when Mr. Paulson did his buying in 2006.

    At Tuesday’s investor meeting Mr. Paulson argued that the bull run was only beginning for gold; he said he was starting the new fund in part to give himself more personal exposure to gold. Mr. Paulson, who is estimated to be worth about $6 billion, said he would himself invest as much as $250 million in the new fund, according to an investor at the meeting

    Tips: buy AUD/USD

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  4. Congratulations on the blog.

    I bought AUD when they depreciated to 0.6218 and I waited until until last week and sold my AUD for 0.932 to the USD. Considering the downwards spiral trend that the USD is in when do you think the USD is going to start recovering some ground.

    The USD is quite low but there are some important currencies that are pegged to the USD so when it goes down… they go down. Until when are they keep on buying enormous amounts of US Treasuries.

    From what I have seen the next G7/8 or G20 meetings are not going to be easy on the USD. Since the emerging markets are doing quite well, they are registering a solid GDP growth that the US and the EU are not.

    Weak dollar until when?

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