Thursday, January 03, 2008

Is the USD Making a Comeback vs. the Euro?

Using foreign exchange data from, the chart above shows the one-year forward discount or premium of the USD vs. the euro from January 2006 to January 2008. (Mid-month rates were used for the months between January 2006 and December 2007, and yesterday's quote was used for January 2008.) After trading at a one-year forward discount vs. the euro for at least 23 consecutive months, the dollar has been selling at a one-year forward premium vs. the euro for the last two months, and is now trading at a one-year forward premium of .40%. Over the last 6 weeks, the dollar has strengthened by about 1.5% vs. the euro in the spot market.


At 1/03/2008 10:35 AM, Anonymous Anonymous said...

Oh No!! Now that nice family from Iceland won't be flying back to Minneapolis to buy Levis.

At 1/03/2008 11:10 AM, Anonymous Anonymous said...

We are watching two ships sinking at different rates.

At 1/03/2008 1:35 PM, Anonymous Anonymous said...

Guess I am a currency trading markets noob, but what does this mean? Is it a predictor that the dollar will rise against the Euro in the future? Or does it mean that the dollar is sinking more slowly or what?


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