The monthly chart of the EUR/USD displays the long term picture of the pair’s adjusted prices, with cycles and classical chart analysis. Looking at the cyclic picture first, we see an approximately four year basic cycle of major lows, with a bigger cycle of approximately sixteen years to separate the…
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No forecast is perfect. Comparing the forecasts for 2008 GDP growth of four G-7 central banks - the Federal Reserve, Bank of Canada, European Central Bank and Bank of England - against our current forecasts suggests that each central bank is very likely to see GDP growth underperform their initial…
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The dollar stabilized in May, as the worst fears of the bears did not materialize. The US economy managed to avoid slipping into a full blow recession experiencing only a slowdown as GDP rose slightly to 0.9% in Q1 of 2008. Furthermore, signs of slowdown were evident in EZX as…
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In March the economic world was facing two major challenges: 1/ The financial crisis and 2/ Prospects of a significant slowdown in growth (recession). The good news is that the financial crisis does not seem so searing after the Fed drew a line in March and guaranteed the existence of…
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The credit crisis has not been kind to the USD. The combination of a US-imposed financial distress and a collapse in the US housing market made forecasting relatively easy; USD was a declining asset set to earn a lower rate of interest. We forecasted that EUR/USD would reach a target…
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The characteristics surrounding the latest oil rise is more similar to the oil spike in 1990 than the shocks of 1973 and 1979. Therefore it is easy to understand why the US dollar has continued to weaken despite growing inflationary pressures. The Federal Reserve has been consistently cutting interest and…
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It is a widely held belief among market participants that the U.S. economy is either already in a recession or very near to one. It’s really not a hard sell. In the past year, wealth has vanished from homeowners, financial assets have disappeared from corporate balance sheets and, more recently,…
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Who could have imagined that the value of one Australian dollar could be equal to one US Dollar? As recently as the beginning of this year, parity or an exchange rate of 1.0 still seemed like a far fetched idea because at the time, the Australian dollar was trading at…
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The Euro has reached unprecedented highs against the US Dollar in recent weeks. On April 22nd, the pair set an all-time high at 1.6018. The very next day, the 28-month rally that had taken the pair to such dizzying heights seemed over. The next two weeks would see the pair…
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For some time now, the USD is looking like a bargain for many reasons: First and foremost, because everybody hates it. Second, because it is still, and for a long time to come, the strategic reserve currency of the world by which every known commodity is quoted by.
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