zondag 16 december 2012

Why the Euro will outperform the U.S. Dollar

The last few months, we noticed that the euro had significantly outperformed the U.S. dollar since August 2012, right when QE3 was going to be announced (Chart 1). I see conditions in the Eurozone improving and soon the markets will focus on problems in the U.S. instead of the Eurozone. Therefore, I believe the uptrend in the euro will continue and I'll explain why.

(click to enlarge)
Chart 1: EUR/USD

As I pointed out earlier in this article, strong currencies are likely to have strong bond markets. So, if we see a strengthening bond market for a certain country, we can be almost sure that the currency of that country will appreciate in value against other currencies.

There are other indicators like PMI, central bank balance sheets that influence the currency of the country.

Go here to read the analysis.

4 opmerkingen:

  1. So gold is never going up again I guess. Wow Europe is fixed.

    1. Gold will be weak till at least the end of the year because of low volume and high amount of shorters and open interest.

    2. I wish I would have listened to you in mid Dec Albert...lol

    3. I wish I would have listened to myself. I was all in gold and it dropped in euro terms. :)