The sign for investment

What i am talking about is the date 06.06.06 when we could see signs of the dollar to recover from a 2 month decline in anticipation of the 17th successive rise in U.S. interest rates by the Fed (which happened today) and in the momentum of the oil prices drop.

And i am not only talking about it , i have hard evidence to show too , not that this matter would need special proof but as the saying goes , a picture is worth ….

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Ok , well what we see above is last month’s graphic of spot exchange rates from the US , EU and UK of the Dollar , the Euro and the Pound.

Spot exchange rates represent the effective price that a buyer expects to pay for a foreign currency in another currency and by having a multinational perspective of how much one currency is worth in terms of the other is significant for our purpose.

So there you have it on the left column and the top graph of the right one the euro and pound clearly depreciating to the dollar from both the perspective of the US exchange rates but also their respective rates to the dollar.

On the 2 bottom right graphs you can clearly see how in the relationship between the Pound and the Euro there is no sign of the pattern present in the graphs with US ties (and a somewhat inverse symmetry is distinguishable )

What we can see there is a variation of around 3.6% in less than 3 weeks with the dollar gaining to about the levels it had held in April this year so if you bought 100k bucks by the first week of June you had earned a cosy 3.6k and by the looks of it you might even double it by August when i have a hunch that it will be around the level held in March .

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(add on 3 july) Well , guess not , the dollar effectively lost all it’s 1 month progress in under 3 days since 29 june when the fed raise happened and i had originally posted.

Now just a word of caution , i am not by far a economist , the graphic data was gathered from the respective monetary authority of each country and i shall not be held liable for its representation or my opinions.

*Graphics courtesy of livefinance http://livefinance.org

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