Is the USD Making a Comeback vs. the Euro?
Using foreign exchange data from FT.com, 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.
Using foreign exchange data from FT.com, 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.
Oh No!! Now that nice family from Iceland won't be flying back to Minneapolis to buy Levis.
ReplyDeleteWe are watching two ships sinking at different rates.
ReplyDeleteGuess 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?
ReplyDelete