As the dollar rallied for a tenth consecutive session on Thursday, Goldman Sachs rather excitedly reversed its outlook for the currency.“The dollar has bottomed!” analysts led by Thomas Stolper wrote. “Dollar lows are almost certainly behind us.”
Stolper’s 3-month, 6-month and 12-month euro forecasts are $1.45, $1.50 and $1.40; over the same timeframes, he expects the dollar to reach Y110, Y108 and Y114.
Goldman had previously forecast $1.56 vs the euro within the next three months, and had predicted Y106 for the same period....MORE
Back on April 24, two days after the dollar set it's then all time low versus the euro at $1.6018 we posted "Europeans, Buy Those U.S. Assets NOW" (see note below). On July 15 the euro marginally exceeded that mark, trading at $1.6038. Last I saw it was quoted at $1.4682.
This will set up the next decline in the stock market (a lesson I learned by paying full-boat tuition to Mr. Market):
Comment by - November 23, 2007 at 1:02 pmHere's the chart for that call, you can push the 5-6 months forward from the July dollar low to approximate the next market peak. If the bear market is to remain intact the next high should be lower than the May 2 closing high of 13,058. Best guess would be Inauguration Day for the 44th U.S. President.
Posted at the WSJ's MarketBeat blog
NOTE: From MarketBeat-
Real Men of Genius: InBev’s Currency Analysts
Joanna Slater has this report on a favorite MarketBeat topic — beer.
Does InBev owe the weak dollar a drink?
That’s what some analysts are suggesting following the news that the Belgian-Brazilian beer giant had launched a $46 billion bid for Anheuser-Busch Cos. If successful, the deal would be the third-largest foreign acquisition of a U.S. company, and the biggest all-cash deal ever.
Economists have long predicted that the dollar’s extended slide would translate into foreign appetite for U.S. assets, since they can be had at bargain prices in other currencies. Plus it means the cost of manufacturing in the U.S., relative to elsewhere, has fallen dramatically. Eventually, if foreign inflows multiplied, it would increase demand for dollars and contribute to a recovery for the beleaguered currency....MORE
...I read Bonddad, not sure what he’s waffling on about.
Here’s something a bit more direct:
Five-six months after the intermediate bottom for the dollar, 1.51-1.53 USD/EUR; just after Ma & Pa decide to call that broker feller and my sophisticated European friends are comfy with the currency bonus on their equity trades, look out below.
At least that was the lesson of the Louvre Accords.
If correct, “Sell in May and go Away” might be too late