U.S. Dollar Now in a Downward Slope Compared to Euro

The trend has changed and the dollar is now in a downward slope compared to the euro. For the first time since the dollar's upward move, we now have the euro hitting higher highs and higher lows.

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Even though we have this confirmation of a change in the trend, I am still of the opinion that the euro will in the future end up at much lower levels against the dollar. The timing of this outcome however is another matter altogether.

Theoretically speaking, commodities and gold should do well, however both are so outrageously overpriced that I dare not even consider the notion.

Assuming that the fed does not overdo it with the printing press, stocks, especially manufacturing stocks (most are priced for scrap), should do just fine and should more than increase in value compared to the loss in the value of the dollar.

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Comments

[DONE_SONZ]

Overpriced?Gold overpriced?No.There is an article on here showing a chart of housing.Prices rose 900% from 1970 to the peak in 2006.The list goes on and on.Assuming the fed does not overdo it with the printing press?;]

2009 Jun 01 06:18 AM

[Old Trader]

"Assuming that the fed does not overdo it with the printing press"

That's not an assumption I'd feel comfortable making. Regarding Geitner's trip to China to reassure China the US believes in strong dollar, the US has been making this claim for quite some time, now, in an attempt to jawbone the dollar higher (or at least to keep it from sinking lower). Evidently, TPTB have never heard of, or don't believe in the old axiom "Actions speak louder than words".

2009 Jun 01 09:14 AM

[doubleguns]

How are US manufacturing stocks going to go up as the dollar goes down. They have to purchase inputs with a cheaper dollar and do not have the power to yet raise prices. Margins are going to be squeezed. This should lower these stock prices.

Amazing as it might seem the S&P P/E is over 120 and with the surge on Friday and today it must be and even higher ration.

I am not getting it. Without earnings there can not be an accurate price. Weak dollar should make this worse and we have over a trillion more dollars to print this year. Ha, ha, ha,

Call the funny farm, I think I need committed.

2009 Jun 01 09:50 AM

[Danny Newton]

Foreign companies primarily using the Euro with manufacturing in the US might be better off. VW might be better off with a weak dollar.

2009 Jun 02 01:04 AM