onzilla

3 Things That Could Reverse the Dollar Rally

"our fiat doesn't suck as bad as their fiat. Some cause for celebration!"

Guess what... that is what makes currency markets move... don't like it? go buy some gold and sit on it.

"The dollar rally was triggered by timely intervention against an oversold condition. The market manipulators (I think they call them "Market Makers") have access to enough trading position information, in fact they have access to ALL of it now that it is computer-based, that it should be an easy feat for them to determine the size and timing of an intervention to induce a short squeeze."

Do you honestly think that there is a coordinated effort of what you call a 'market maker' to minipulate prices? you have obviouly never spend any time on a FX desk.

"intervention" - what the heck are you talking about.. there has been no intervention (other than verbal) to support the USD.

what about the fact that the US earns roughly the same return on its FDI that the rest of the world earns on the FDI in the US? (mostly invested in goverment fixed income).

so to make a long story short, i am not saying i know what is going to happend with the EUR/USD fx rate. Purchasing Power Parity dynamics would have the EUR off by another 10-20%, but again.. that isn't a great way to trade currencies.

Bottom line, i know what i don't know - fx rates are largely a coin flip in the short / medium term. Take a look at the track record for any 'currency strategist' that employ the same 'sound' reasoning that you do. it sucks.