US Dollar collapsing

[Wezil]

Canadian dollar vs US$ is at highest level it has been in over a decade. Our socialist utopia rocks.

[Harovan]

D'oh, this thread is not just about the €

If the value of the Dollar was low only towards the Euro, but normal to other currencies, it would not be the Dollar being weak, but the Euro being strong. So what does the decline in other currencies tell us other, that it is indeed the Dollar going through a valley. It's not the first time and for sure not the last. It will recover, it always did. I would not draw collapse scenarios out of it, but try to use it for my advantage.

[JimmyCracksCorn]

Originally posted by Wezil
Canadian dollar vs US$ is at highest level it has been in over a decade. Our socialist utopia rocks.

Actually take a look at the exchange rate today.

In a bizare set of circumstances, the loonie and the US dollar are tumbling TOGETHER today. I've never seen anything like it. Normally if the dollar rises, the loonie falls and vice versa... never the same!!

ORONTO, Nov 18, 2004 (The Canadian Press via COMTEX) -- Early indicators were mixed for North American stock markets Thursday as oil prices edged up and the U.S. dollar continued to lose value - and the Canadian dollar started to follow suit.

Wall Street futures suggested a weak start for regular trading and European indexes were mixed in early action.

Asian markets closed mostly higher, but Tokyo and other exchanges were hurt by concerns over the U.S. dollar's decline against Asian currencies, with the greenback hitting a more than 4½-year low against the Japanese yen.

Japan's Nikkei Stock Average of 225 issues dipped 48.87 points, or 0.44 per cent, to 11,082.42 points.

The dollar's depreciation came after U.S. Treasury Secretary John Snow suggested Wednesday his government won't intervene to boost its value. Snow said "the history of efforts to impose non-market valuations on currencies has at best been unrewarding and checkered."

In Hong Kong, the share market edged down as traders sold banking giant HSBC Holdings PLC after its U.S. unit reported poor third-quarter earnings. The blue-chip Hang Seng Index dropped 25.16 points, or 0.18 per cent to 13,799.82.

The euro rose to a new high against the U.S. dollar for the second straight day in European trading as investors showed they remain concerned about the state of the U.S. economy.

The euro traded as high as $1.3074 US, breaking the previous day's high of $1.3047.

The Canadian dollar - sometimes seen as a U.S. satellite currency - opened at 83.28 cents US, down 0.51 of a cent. The loonie had gained 0.15 of a cent at 83.79 cents US.

Worries over continued declines in U.S. distillate stocks led to a slight rise in crude oil futures Thursday, with prices pushing above $47 US a barrel. Light, sweet crude for December delivery on the New York Mercantile Exchange traded at $47.09 per barrel by late morning in Europe in electronic trading, up 25 cents.

http://news.tradingcharts.com/futures/6/1/61250916.html

Sinners, repent!

Oh and Wezil. This doesn't rock. You realize 80% of Canadian exports go to the US. 82 cents is the level of purchasing power parity... meaning its no longer cheaper to buy products in Canada with US dollars, and now thats its continuing to rise, its actually more expensive. Exports just fell last month, for the first time, by about $1.5bn, and that was when the loonie was lower. This is baaaaaaad news for Canada.

[Wezil]

Originally posted by JimmyCracksCorn


Actually take a look at the exchange rate today.

In a bizare set of circumstances, the loonie and the US dollar are tumbling TOGETHER today. I've never seen anything like it. Normally if the dollar rises, the loonie falls and vice versa... never the same!!

Still having my morning tea and cigarettes. Too early for real news. Besides, I want a longer trend than just one day (as was pointed out earlier).

Oh and Wezil. This doesn't rock. You realize 80% of Canadian exports go to the US. 82 cents is the level of purchasing power parity... meaning its no longer cheaper to buy products in Canada with US dollars, and now thats its continuing to rise, its actually more expensive. Exports just fell last month, for the first time, by about $1.5bn, and that was when the loonie was lower. This is baaaaaaad news for Canada.

Yeah yeah. I'm sorry but I don't want a 20% crutch to be competitive. Make my country less socialist and we will compete just fine. Besides, I HATE paying $5 for a head of lettuce in February.

[JimmyCracksCorn]

Besides, I HATE paying $5 for a head of lettuce in February.

This is true.

[laurentius]

Sir Ralph: Yeah ok, I admit Won for example has been under valued since 1998. So its gaining what some people might call its normal value. So the weakening dollar might be a long term trend and inevitable. Yes the situation with other asian currencies is complex also, since they dont want their currencies too strong against the Yuan

Still we dont know if the asian currencies keep getting stronger beyond the value considered right and is the new gains due to good performance of their economies or just because the pressure on dollar. The elements for collapse are there. Only time will tell if it started already or not.

Tomorrows a big day, G20 meeting and all. Perhaps some surprises. coming, especially from China. And I wonder how long the Japanese are going to prop $ up. At least they are still making money doing so. But as my friend says, "The trend is your friend, dont fight it".

[Whoha]

Originally posted by Sir Ralph
A while ago, the Euro was heavily underrated. Did this make your life worse (unless you wanted to travel in the US)? If along with a drastical decline of foreign value the prices inside the US would skyrocket, now that I would call collapsing. But this is not going to happen anytime soon. The present slight disorder of the Dollar's market value will eventually level out, because it strengthens US exports and weakens imports, which will lead to a lesser trade deficit. It's a good time for investments in the US, and for travels of course. Do you have some Euros to spare?

"U.S. Trade Trends With Europe

A weakening dollar, yet a rising trade deficit with Europe:

Decline in value of dollar versus euro, Jan. 1, 2001-Nov. 15, 2004: 27%

Increase in U.S. goods trade deficit with 15 European Union countries, 2001-2003: 45.38%

Increase in U.S. goods trade deficit with 15 European Union countries, 2003 ytd-2004 ytd: 14%




Sources: Trade Dataweb, U.S. International Trade Commission, http://dataweb.usitc.gov; Oanda, The Currency Site, http://www.oanda.com"

http://www.census.gov/foreign-trade/balance/c0011.html

[DanS]

The trade deficit normally goes up after a currency fall before it goes down. There's often a significant lag time -- a half year to a year. These are slow-moving trends.

[Tingkai]

Originally posted by Wezil
Yeah yeah. I'm sorry but I don't want a 20% crutch to be competitive. Make my country less socialist and we will compete just fine. Besides, I HATE paying $5 for a head of lettuce in February.

Yeah, the lettuce will be cheaper, but for many Canadians it will be too expensive after they lose their job when exports collapse.

[Wezil]

Originally posted by Tingkai


Yeah, the lettuce will be cheaper, but for many Canadians it will be too expensive after they lose their job when exports collapse.

Spoken like a true socialist. Enjoy your crutch. Apparently I have considerably more faith in the Canadian worker than you do. Excessive government taxation/spending is our #1 problem.

[Whoha]

Its going to take quite a bit more time then that DanS, thats 4 years of falling dollars and rising trade deficits. If we assume that eventually it will have an effect(and its not a given considering that we don't have perfect free trade), then it will be several more years before it will, and perhaps 20 years from now we'll see balance in trade with Europe. And then, we get into the problem of we probably devalued the dollar too much, and other countries will likely throw up protectionist barriers against US goods in addition to the ones that they already have.

Originally posted by Tingkai
Yeah, the lettuce will be cheaper, but for many Canadians it will be too expensive after they lose their job when exports collapse.

But then they can move those people to something else in their Hyper efficient economy can't they?

[Saint Marcus]

what are the effects on US inflation so far?

[Rufus T. Firefly]

Originally posted by Spiffor

Not in Turkey anymore?

No, we moved, and Turkey immediately went through a period of economic improvement. Now we're in the Philippines, where the govenment has just officially declared an economic crisis.

Apparently, my very presence screws up a national economy.

[Ben Kenobi]

82 cents is the level of purchasing power parity... meaning its no longer cheaper to buy products in Canada with US dollars, and now thats its continuing to rise, its actually more expensive. Exports just fell last month, for the first time, by about $1.5bn, and that was when the loonie was lower. This is baaaaaaad news for Canada.

That's the point. Unsurprising to see the two fall together.

[Ben Kenobi]

Yeah yeah. I'm sorry but I don't want a 20% crutch to be competitive. Make my country less socialist and we will compete just fine. Besides, I HATE paying $5 for a head of lettuce in February.

Let's hope this is how they respond.