The Options Box Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Options Box

QQQ 625.05

+0.1%

Dec 9 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: X Y Zebra who wrote (7471)	11/18/2000 10:55:27 PM
From: dli	Read Replies (2) of 10876

I am no expert at currency trading (although I had a bout with it... but that is another story...) Trading in currencies is predominantly driven by technicals which explains why trends once firmly established are very hard to break unless there's compelling fundamental changes. A currency that has been forced on a geographical area in an attempt to compete with the US will NOT succeed. Why ? Because the political and economic differences of the countries that participate are huge that I do not even begin to comprehend what quality of Marihuana the European bureaucrats were smoking when they decided to create it. Actually the Euro was much more a political than an economic conception. Those politicians considered the benefits for the political unification of Europe to outweigh potential economic problems due to the significant differences in economic development within the Eurozone countries. However, while the Euro did not live up to the hopes of some politicians that it would become an alternative world reserve currency and those who bought into that idea, especially the Japanese, got burned badly its introduction has actually resulted in quite a few tangible economic benefits for Europe. Trade within Europe has become a lot more efficient as hedging and transaction costs due to currency conversions have been eliminated. The devaluation against the US Dollar has stimulated export demand which in turn has boosted economic growth. Of course the flip side to this is that it creates disincentives to carry through with needed structural reforms which is especially dangerous considering that most European goverments are currently dominated by socialist parties. In the short term it is only with energy prices that the weak Euro presents a real problem for the Europeans as crude oil is settled in US Dollars. Most of the worry in the population concerning the weak Euro is due to most people's intellectual inability to distinguish between internal stability, i.e. price stability/inflation, and external stability of a currency. BTW from a historical perspective the Euro (taking the German Mark as a proxy) has been much lower against the US Dollar in the mid-eighties than it is now. Interest rates in the US stopped increasing in May, in Europe... they continued with the hikes... One would assume that the Euro would be far more attractive than the US dollar, yet... the reverse has taken place.... Why? Interest rates in Europe are still considerably below those in the US. Imagine the English (in their own free will), eating escargots (I am talking about the "man on the street"). It will never happen.... You've got a funny picture of the French <g> Then there is racial issues.. say in Germany... What does that have to do with the value of the Euro? Besides those issues are not any more sever than those in any other country including the US. This is a case of preception being out of whack with reality due to the Germans' historical heritage. there is no other economy as strong... I doubt that the US dollar would soften -vs- the Euro or any other currency.... Agreed. Dave

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next