Stolper goes contrary, sees dollar weakness in 2014

"Tapering is in the price already; we find it difficult to see where the dollar strength would come from," says Goldman's Tom Stolper, leaning against the crowd by taking a bearish view on the greenback (UUP +0.1%) for 2014.

He sees the dollar falling to $1.40 against the euro (FXE -0.2%) - no big deal given it's at $1.3724 at the moment - but it's a large deviation from the Bloomberg contributor consensus of a strengthening all the way to $1.28. Of 46 surveyed by Bloomberg, 42 expect the greenback to gain vs. the euro next year.

"We expect all major central banks on hold until at least 2015 - hence no immediate catalyst" for the dollar to strengthen further, says Stolper.



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Comments (2)
  • Brian Bobbitt
    , contributor
    Comments (2087) | Send Message
    I wish I could figure out what this piece is all about. I mean, look at the dollar index chart, it has been trending down for years. So what. The E$ is in such deep doo doo the only reason it is still a currency is because it is being artificially supported by those with much to lose with the end of the E$. This is no news at all, just an ongoing situation. If this smelly ole sea captain can see it with his eyes in a foggy night, it needs no neon from this forum.
    Just go to any chart and take a look for the long term. American and the dollar and the economy and Eurozone is not going to collapse, just die a slow death
    Capt. Brian
    The Lost Navigator
    13 Dec 2013, 07:30 PM Reply Like
  • Brian McMorris
    , contributor
    Comments (1266) | Send Message
    The long term chart is that the Euro should return to parity. That is where it was in 2000 when it came into existence (originally defined as 1$:1EU). It took many years of analysis and simulation to come up with that exchange rate. So, why does the Euro now trade at 1EU to $1.40? The artificial weakening of the $USD is the answer. Since 2000, the US Central Bank first under Greenspan and then under Bernanke, has deliberately devalued the American currency against the Euro, for reasons of economic expansion. Of course, that artificial manipulation always ends badly and the economy and markets crashed in 2008 causing the dollar to strengthen. It again weakened with Bernanke's renewed campaign to devalue. What happens when stimulation (QE) ends? Especially if the ECB continues to support its sick states with stimulation? The dollar will move back towards parity. It is hard to know the date, but it is coming.
    13 Dec 2013, 08:08 PM Reply Like
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