BMW stuff : - cheaper in Germany ?
- Thread starter SL2
- Start date
Nuke said:
i need to plead igorant with regards to the reason why euro is going to get stronger. i can check with my gals back in the office and pm u (but we also rely on the financial advisers from the bank and of course my co. central financial team in HQ). it's forecasted to go up again over the next few months to as high as 2.2 and i was asked to hedge if we're expected to pay in Euro (that's from my conversation with my central team).
disclaimer : please read this and rely on your own judgement.
fabsmiche said:
Yield differential between the currency pair is often cited as one reason. But I'd presumed there will be a lot of reversals and unwinding of option-related positions from the long USD short EUR / long USD short Asian currencies this year, especially when many technical (chart) points were triggered. Perhaps TripleM might not agree with me.
fabsmiche,
While yield differential is one factor that 'naturally' seems to coz the high yielding currency to appreciate more...
Other factors played significant part too. The all time high in euro was last seen in late December vs USD....1.3666
Factors that hv contributed to the Eur Usd bull runs included ( not necessarily in order of significance):
1.Weak sentiment towards Bush's renewed administration, and exacerbated by Winston's avatar and signature ( irrelevant... :laughlik: )
We had seen pretty decent economic data releases outta US but that still didnt stop the USD from falling.
2.Increased foreign reserves in favour of Euro as opposed to the traditionally USD reserves. Many Asian central banks were sitting on the bids for Euro...
Also we saw change of currency payment in favour of Eur vs USD...notably seen Oil transaction.
3.Strong speculation that many central banks were unwinding their long holding of US treasuries
4.Play in FX market, bullish on euro....and alot of Exotic Options were put on with trigger barriers from 1.3 all the way up to 1.37 or even higher vs USD
5. The traditional US administration on Strong Dollar Policy didnt work and no concerns were shown on the weakening dollars. Why? Help their global exports.
Having said that...
Retracement in the Eur vs US took place in the beginning of 2005. It has depreciated by as much as 5 pct from the high seen in December 04.
Seems to me that we are not goin to see that high level again anytime soon, at least for the first quarter. Strong factor cited was the unwinding (or Stop Loss it's commonly called) of long positions in Eur Usd and Eur Jpy ( the latter reached 140ish against JPY and now only 133.80 levels)
So in summary, the weakening USD was the real scenario. The greenback has weakened not only against Euro but JPY, GBP , Aud, Nzd everything u name it...
And to relate that with our SGD, it's not necessarily 100 pct of the time that strong euro will make our SGD weak...
Basically look at how SGD performs as far as the basket Asean currencies and JPY for that matter. When JPY appreciates, SGD tends to follow...
So if u think bout it, the percentage moves in the Eur vs Sgd compared to Eur vs Usd ain't that much in real terms coz Sgd also appreciates vs the USD as a result of JPY appreciation too.
Now...Kopi on you
Cheers
While yield differential is one factor that 'naturally' seems to coz the high yielding currency to appreciate more...
Other factors played significant part too. The all time high in euro was last seen in late December vs USD....1.3666
Factors that hv contributed to the Eur Usd bull runs included ( not necessarily in order of significance):
1.Weak sentiment towards Bush's renewed administration, and exacerbated by Winston's avatar and signature ( irrelevant... :laughlik: )
We had seen pretty decent economic data releases outta US but that still didnt stop the USD from falling.
2.Increased foreign reserves in favour of Euro as opposed to the traditionally USD reserves. Many Asian central banks were sitting on the bids for Euro...
Also we saw change of currency payment in favour of Eur vs USD...notably seen Oil transaction.
3.Strong speculation that many central banks were unwinding their long holding of US treasuries
4.Play in FX market, bullish on euro....and alot of Exotic Options were put on with trigger barriers from 1.3 all the way up to 1.37 or even higher vs USD
5. The traditional US administration on Strong Dollar Policy didnt work and no concerns were shown on the weakening dollars. Why? Help their global exports.
Having said that...
Retracement in the Eur vs US took place in the beginning of 2005. It has depreciated by as much as 5 pct from the high seen in December 04.
Seems to me that we are not goin to see that high level again anytime soon, at least for the first quarter. Strong factor cited was the unwinding (or Stop Loss it's commonly called) of long positions in Eur Usd and Eur Jpy ( the latter reached 140ish against JPY and now only 133.80 levels)
So in summary, the weakening USD was the real scenario. The greenback has weakened not only against Euro but JPY, GBP , Aud, Nzd everything u name it...
And to relate that with our SGD, it's not necessarily 100 pct of the time that strong euro will make our SGD weak...
Basically look at how SGD performs as far as the basket Asean currencies and JPY for that matter. When JPY appreciates, SGD tends to follow...
So if u think bout it, the percentage moves in the Eur vs Sgd compared to Eur vs Usd ain't that much in real terms coz Sgd also appreciates vs the USD as a result of JPY appreciation too.
Now...Kopi on you
Cheers
But I'd presumed there will be a lot of reversals and unwinding of option-related positions from the long USD short EUR / long USD short Asian currencies this year, especially when many technical (chart) points were triggered.
Yo kenn, what does this statement mean? How does a reversal occur?
Thanks man TripleM!
Yo kenn, what does this statement mean? How does a reversal occur?
Thanks man TripleM!
