Dear Anna, If you can tell what do you expect for a long term investment for about 2 – 5 years… Is it better to invest in Dollar or Euro…and what in short term till November and December. What do you expect Euro and Dollar outlook in the given circumstances… Hope to receive ur reply in this regard at the earliest. Regards, Zeeshan
Dear Zeeshan
Thank you for your email and although you have sent a very simple question it actually requires a very complex response which I will do my best to give you.
At the moment the euro is falling heavily against the US dollar and has seemingly spiralled out of control due to a combination of factors: falling oil price, repatriation of dollars, unwinding of the carry trade and buying of T bills. The euro is also suffering from a lack of confidence from investors as European banks have, until recently, refused to acknowledge the extent of their exposure to toxic debt. At the first sign of trouble the tensions within europe soon became apparent. Also we have the US elections and as i have mentioned in my newsletter in general a democratic win is seen as dollar positive while a win for the republicans has tended to lead to dollar weakness.
In the short to medium term we can expect more volatility as the market awaits Nov 4. Looking at the weekly and monthly charts we could be looking at the euro dollar even dropping to parity.
Hope the above helps.
Kind regards.
Anna