FOREX-Dollar falls

[lamborghini]

Originally Posted by asker

What is the relationship between currency exchange, balance of payments, reserve accounts and trade deficits or surpluses? Any help would be very useful.

Usually countries with strong exports, positive balance sheets and low debt will have a strong currency. This, until the strong currency makes exports too expensive for foreign customers. Once exports starts dropping, so does the currency.

Some analysts have spoken about a potential move past to 1.6000 for the EUR/USD. Clearly, that is a large move especially psychologically. What specifically do you think. Thanks a lot!

[lamborghini]

Originally Posted by gss

Some analysts have spoken about a potential move past to 1.6000 for the EUR/USD. Clearly, that is a large move especially psychologically. What specifically do you think. Thanks a lot!

Although Bernanke yesterday or the day prior, did not explicitly state that the FED will end the easing cycle, the FOMC statement did hint that they may be changing their bias from dovish to neutral. I personally think that the implication of such a shift in policy, for the long term, should favor the dollar as markets begin to appreciate the fact that most of the monetary adjustment by the Fed has already been made. With most of the rate cuts behind us, the greenback, which has been in freefall, mostly due to unfavorable interest rate differentials, may now find some reason to rally.

[asker]

After some encouraging German figures suddenly Europe seems to be doing okay again. Where do you see EUR/USD pair.