# Dollar v Euro.. When to cash in?



## G-Money (28 Oct 2008)

Hi Folks,
Long time lurker first time poster.

I recently bought into a substantial investment that converted to dollars and now thanks to recent trends has risen 23% since July thanks to the exchange rate.

I would like to get opinions on the dollar v euro medium to long term levels. This is a substantial return and although I knew the dollar was way too low v the Euro it was more by luck than design that I got in when I did.

What do readers think will be the end result of the relationship after all the market turmoil has abated?
Do we see a return to almost parity or otherwise?


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## Eng_Ltd (29 Oct 2008)

Very hard to predict, I know some are still thinking about investing in dollars so that would lead towards better to come as far as you are concerned. General consensus would be hope the dollar gets stronger with the election coming round, can never predict it though or we'd all be spread betting on this.....


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## nuac (29 Oct 2008)

Unless you are a seasoned currency/forex trader with time and capital, the best thing to do when you are thinking of investing in currencies is to lie down in a quiet room until the feeling wears off.

The furthest I would go is to put 10% of your liquid assets into gold, and leave the rest on deposit, half euro, half dollar.    Then get on with your life rather than thinking you can trade those markets on a daily or hourly basis.


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## smiley (29 Oct 2008)

Nuac...great answer!

pure and utter speculation trying to predict currency movements.

Why not just go down to the bookies?


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## therock (30 Oct 2008)

The dollar is getting stronger because people in the States are withdrawing their cash from the banks and putting it in safes...but that's just in the current situation...

I think in a year or so when everything is settled down, you will see a return to a relatively weak dollar/strong Euro situation.


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## johnnygman (30 Oct 2008)

Interest rates and oil have the major influences over the Dollar prices at present.
This is shown by the weakening of the Dollar with the FEDS rate cut with investors returning to oil for now...


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## G-Money (30 Oct 2008)

All, thanks for the input. 




nuac said:


> Unless you are a seasoned currency/forex trader with time and capital, the best thing to do when you are thinking of investing in currencies is to lie down in a quiet room until the feeling wears off.
> 
> The furthest I would go is to put 10% of your liquid assets into gold, and leave the rest on deposit, half euro, half dollar. Then get on with your life rather than thinking you can trade those markets on a daily or hourly basis.


 


Dont worry, will not be trading it. My investment comes due in about 18 months. Trying to gauge the state of the currencies is pot luck I know. However, maybe we can speculate.. Its more fun.
By that time, maybe the US will be starting to recover economically leaading the world. That could be good for the dollar. I dunno, maybe the Chinese will have bought them at that stage..

Im hoping that the perfect storm comes in wrt the investment yield coupled with the currency yield. Is anyone looking to invest in the US Markets at this point in time hoping for a double positive on stocks and currency?


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## Eng_Ltd (31 Oct 2008)

johnnygman said:


> Interest rates and oil have the major influences over the Dollar prices at present.
> This is shown by the weakening of the Dollar with the FEDS rate cut with investors returning to oil for now...


 

But the dollar is getting stronger...


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## Simeon (31 Oct 2008)

WAS!It is now showing at $1.3035 to the Euro


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## johnnygman (31 Oct 2008)

Eng_Ltd said:


> But the dollar is getting stronger...


 
Surely you must have some interest in this before you contradict.
The Euro had a strong rally against the Dollar after the interest rate cut and jumped several basis points, i was not referring to the previous weeks slump, thought that was fairly obvious and was widely understood by the previous posters.


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## Eng_Ltd (4 Nov 2008)

I do have interest! But I am simply making the statement going by the trends of dollar v euro. No doubt dollar has strengthened considerably in last two months, question is, is there more to come from it with opinions of americans going up with election or has that already come and we're seeing it as good as it gets currently for another while.


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## Glenbhoy (7 Nov 2008)

I have been looking at this quite a bit over the past while, namely because I have a lot of dollar expenditure coming up - from what I can glean from various internet musings ranging from spread bettors, political buffs and various other analysts on my daily podcasts, the dollar has strengthened over the past while in a flight to safety.  This is not expected to last, especially with the US printing off dollars at the rate of no man's business (well maybe helicopter ben's).  The question is, when will the preceived real weakness of the dollar start to be reflected in its value?  Unfortunately for me, most of my expenditure is due in the next month and I don't think it's going to weaken significantly in that period.
The answers above make sense, none more so than the one highlighting that none of us really have a clue about where it is going.
In your circumstances I would be tempted to take some profit if a mechanism is available for this, it depends on the value and liquidity of the investment of course, but maybe you could look at non traditional mediums, such as spread betting if the banks are unable to provide a service for you.
Remember exchange rates are fundamentally (theoretically anyway) determined by interest rates and growth rates - the dollar always trades a little better than it should because of its status worldwide and of course the fact that oil is priced in dollars.
In the medium to long term, I think the dollar will weaken significantly against the euro, but that's one idiot's opinion.


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