Mighty Euro back up above 50 again - Almost on parity to Sterling now!

[drogon]

Waerth, my missus minds too -> 500 bht can still get you a lot of things in BKK (in addition to food) while back here it doesn't even buy you a meal at a cantina...

-> I thought your income came from Thailand or Asia only????

 

 

[trooper]

At the moment I can spend 20% more per month compared to what it was a couple of months ago. So it matters a lot. I'm even thinking about investing here a littlebit if the Euro climbs to 53 something.

[gobbledonk]

Noticed that the Pacific Peso has gained a couple of baht over the last week or so - not sure if this is the result of strong retail figures over Xmas or just a softening of the baht, but made sure I booked our flights to Chiang Mai today to take advantage of it.

 

Given that our mining exports have fallen off by more than 40%, there isnt a lot of optimism for our currency in 2009.

[HeartThais]

Euro is benefitting from open reluctance by Trichet to cut rates further. At the same time, bad news continues to come out of Germany. Also, exposure of European banks to currency crisis in Balkans and european EM regions remains. There is some dischord here and I strongly suspect Trichet will be forced to retreat from his strong Euro stance.

[HeartThais]

A major currency crisis has been brewing for a few months now. I linked a research note a while back if you want to search for it. Belarus was just forced to devalue their currency 20%. If oil prices don't come back up, I fear we will see a domino effect similar to Asia 97. Very similar conditions exist where many companies have their loans denominated in dollars or euros. If these local currencies collapse, the Eurozone will take the brunt of that damage. I personally would not be long Euros at the moment.

[simie]

I think your right. The UK is in a shit state at the moment but I think most of the bad news has come out. In the euro zone a lot of the bad news is still to come, so all those sitting smugley on their euros might be in for a nasty shock in the not to distant future?

Simie.

[buffalo_bill]

The UK citizens might now reconsider their unwillingness to join the Euro . Anybody with a vague knowledge of daily news should realise what a blessing the Euro is at the moment . But up to them of course .

[buffalo_bill]

At the same time, bad news continues to come out of Germany.

 

Plus a lot of good ones , just one them being that Germany did never join the Anglo- Saxon phantasies of creating money by investment banking and strengthening the manufacturing sector instead plus there is no property air-bubble to deal with .

 

[HeartThais]

Plus a lot of good ones , just one them being that Germany did never join the Anglo- Saxon phantasies of creating money by investment banking and strengthening the manufacturing sector instead plus there is no property air-bubble to deal with .

 

Deutsche Bank would disagree since they transformed themselves spectacularly from a retail banker to the world's leader in trading (particularly derivatives) over the last 5 years. DB is also the most highly leveraged of the major banks. Germany has been pretty much leading the way in investment banking and is arguably the most aggressive. They dodged the subprime bullet but they also lost $1B last month on credit trades. The kinds of trades were "basis trades" which involve offsetting positions. Losing $1B in such trades would require extremely aggressive positions. Germany may not suffer from the property bubble but Spain and Ireland weren't so lucky.

 

I'm not knocking the Eurozone - my personal finances depend a lot more on the health of Europe than the US. Germany is far and away the strongest economy there and my point is that it isn't doing great. Be careful that nationalistic pride doesn't cloud your financial judgment. It really doesn't make sense for the Eurozone to escape the malaise of the US and UK. There has been nothing but bad manufacturing data coming out of Eurozone but people seem to be ignoring it.

 

My personal bet is that EUR is more likely to fall over the next 3 months against GBP/USD. This goes against conventional wisdom as currency trends are hard to break but I think Trichet will reverse his stance.

[HeartThais]

The UK citizens might now reconsider their unwillingness to join the Euro . Anybody with a vague knowledge of daily news should realise what a blessing the Euro is at the moment . But up to them of course .

 

What I see is that England and the ECB have two completely different approaches to monetary policy. I don't think UK citizens would view a loss of autonomy as a blessing. I also don't think UK citizens want to lock their currency conversion in at the historical bottom.