HSBC is now forecasting the U.S. dollar to decline in 2016. I made this call months ago.
They're catching on to some of the arguments I made here and also some of the things that I teach in my Forex course. Namely, that rising interest rates are bearish, not bullish, for the dollar. (I'm not sure they really understand why, however.)
Anyway, I am building a short dollar position at the current time. This trade would have been doing much better right now were it not for all the China related panic and falling commodity prices, but people are buying dollars for all the wrong reasons, I feel.
Patience is the key, here.
2 comments:
USD/JPY has been working lately... imo this pair (bullish Yen) is actually helped by collapsing oil prices in USD terms... opposite short term if you were bullish CAD (no bottom yet with all the oil collapse chaos...)
EUR/USD oil effect seems to be neutralized in here so other product prices (other than oil) in USD terms offered by EUR zone sources might be starting to firm up and are offsetting any bearish EUR effects from oil...
"Patience is the key, here." > Then I'm in BIIIIIIGGGG trouble! ;)
Mike - Have you ever looked at the embedded options in $ Index futures relative to the component currencies? If you are long the USDX against an arbitrage basket of the component currencies you in fact have a risk/reward profile similar to that of a long option straddle on those currencies.
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