The $USD and the Fed Announcement

[BLazeD]

Sorry if some of my terminology is wrong, I'm not from the US and don't really know how it all works.

With the Fed announcement coming (what date btw?), is the $USD expected to rise or fall?

Just going by my own basic economics, if the interest rates fall, less people will want to invest their money in US banks, so demand for the $USD will fall and so will the value?

Cheers

 

[domain newbie]

i dono- but somebody familiar told me low usd is good for US economy- i wasn't concentrating on the rest of the story- sorry

..something about China ?

 

[Yaadoo]

Low interest rate means more spending. Because to get lower interest rates means increasing the money supply to meet the demand by printing more money, probably. Ya this will drop the USD. And lower USD doesn't mean good or bad for the economy by itself. Its good for export bad for imports.

Lower value of USD also means inflation.

Is that what the feds said though? They aiming for lower interest rates?

 

[Theo]

Are you trading the FOREX? It's more complex than that.

A weaker dollar means more exports (for US-manufactured items). It means the US is a cheaper destination for European tourists (except the security measures and war in Iraq make it unappealing to many). Low interest rates means less debt, time to refinance homes and cars and also spend more money on goods. It gets the market moving in a vicious cycle

 

[Poker]

The fed announcement is Wednesday @ 2:15 Eastern. Most expecting a .50 cut.
.25 or less will most likely cause a market selloff, and the language used is also always important. As rates fall, inflation fears rise. This hurts the US dollar and helps gold as investors look for safety.

 

[Theo]

A .75 is not too unwarranted. We shall see

 

[Gerry]

Falling dollar means demand for US goods should rise. But that does not mean squat with tariffs imposed by other countries.

For a brief moment, I actually saw the US dollar a fraction below the Canadian dollar.

The rate cut is what banks loan banks. The consumer for the most part is essentially SOL. The interest rates on mortgages dropped for a total of 3 hours after the last rate cut. The 75 basis point drop was immediately swallowed by an increase in 80 basis points in the bond market.

Banks are not bailing each other out. Bank of America (who has now bought Countrywide for 4 Billion after an injection of 2 billion did nothing) posted a 94% decrease in profits for the quarter ending in December. Wachovia announced a 98% decrease.

Merrill Lynch posted a lose of $9.9 billion. Gone are the good old days when loses were reported in the millions.

Will this effect global markets? You betcha. Deutsche Bank Group of Germany is foreclosing on a $3 Billion default of a casino under construction in Las Vegas. When developers start walking away from Billion dollar projects funded by global banks and entities, it affects everyone.

Most of all the numbers reported thus far have been directly related to the housing and consumer market. Now comes the big numbers from the business sector.

The general gut feeling by money managers is no one is telling the truth and this is just the start.

New home sales fell by a record 25% for 2006.

So yes... the dollar sucks, will keep sucking. Your money is good here. America is for sale.

Come and get you some.

 

[BLazeD]

Thanks guys - I am just wondering when I should withdraw a substantial Paypal balance back here to New Zealand.

 

[whitebark]

That kind of timing can be tricky, but instead of sitting it at paypal earning nothing, why not withdraw it anyways and put it to use elsewhere?

Gold while high, seems set to continue to climb. And if the world's fiat debt-based money finally collapses in upon itself, those holding tangibles like gold are not going to go hungry.

 

[britishbulldog]

A cheaper dollar also means cheaper domains ;-)

 

[Poker]

A .75 is not too unwarranted. We shall see

I would'nt expect a .75 cut after the emergency .75 recently, that has already made them look too desperate. If I had to guess I would expect them to make it .50 or .25 along with language that tells investors that they will be weaned in the near future...on that note even a .50 cut could result in a market sell-off Wednesday because it's already baked in the cake (sell on the news).

 

[sashas]

what this means is that I'll lost a good $5000 when move from the US to India in two weeks. The Indian Rupee has gained a lot against the dollar, meaning bad exchange rates for me.

 

[draggar]

So yes... the dollar sucks, will keep sucking. Your money is good here. America is for sale.

Come and get you some.

Does that mean other countries will start outsourcing into the US? :lol:

 

[Poker]

Fed cut by .50, short rally after announcement then market sold off. Further downside after the close in index futures. Gold looks bullish and the dollar bearish...enjoy.

 

[Nodnarb]

The more the US Feds cut interest rates, they weaken the dollar worldwide. We were living large on borrowed money but it's time to pay the piper. Dollar will continue to weaken throughout the first part of 2008.

 

[sashas]

When I came to the US an year ago, the rupee was 46 to a dollar.
Now its hovering around 38-39. The lowest it went to was 35 last year.

In absolute numbers, this stacks up HUGE

 

[flybuzz]

can average people take advantage of this and make money some how?

 

[Theo]

can average people take advantage of this and make money some how?

See resources at http://forex.com

 

[TheLegendaryJP]

No matter how they cut it the US economy is a vicious cycle of over spending due to credit and as seen in the housing market, lower rates. So how do they ease the pain and boost the market... lower rates ! That economic situation imo is far from settled. The world isnt fooled and their dollars drop in power is evidence. Like a disease they dont want people to use credit unwisely yet if they dont the economy suffers etc. Big vicious cycle of greed and unbalance

 

[nameadvertising.com]

A falling dollar means we domainers in the U.S must consider appropriate pricing for buyers, especially buyers outside the U.S, particularly from countries whose currency has risen substantially against the US dollar. Inflation in the US does not nearly buy the same in goods and services. Consequently your (US domainer) domain sales dollars does not buy you goods and services you could have acquired say 2 years ago.

Keep in mind, cheaper US goods due to falling US dollar cannot be applied to domain names. Domain valuation is universal.

When I make my sales, I pay attention to this fact.