money for my analysis
in case you don't know what's happening in the financial world, the US dollar has shed 3.5% against the euro and major currencies in the last few days and oil has again jump to record prices.
my analysis is that you should sell USD now coz it will continue to weaken. it might rally alittle but in the long run, it will continue to fall till dec.
given the current exchange rate of 0.545 pounds for a dollar, selling 1,000,000 USD will 'earn' you 545,000 pounds. (so you borrow 545,000 pounds from the bank if you can do that. at a rate of 4% p.a.)
if the dollar continues to weaken 1-2% within the next 2 weeks and 3-4% within the next 2 months (my analysis).
in 2 weeks' time, if you can buy 1,000,000 USD at a rate of 0.5395 and that will cost you 539,500 pounds. so income - cost =profit. 545,000-539,500=5450 pounds.
additional cost: interest of 2 weeks for borrowing 545,000 at 4% will only cost you 839 pounds.
in 2 months' time, if you can buy 1,000,000 USD at a rate of 0.52865, that will cost you 528,650 pounds. income-cost=545,000-528,650=16,350 pounds.
additional cost: interest of 2 months for borrowing 545,000 at 4% will only cost you 3,634 pounds.
ok, so who's interested in this high-risk money venture where you can potentially earn 12,000 pounds in 2 months.
btw, currency traders do this every day. so their portfolio increases by a compunded interest of about 0.9% every day. at least that's what i think...
my analysis is that you should sell USD now coz it will continue to weaken. it might rally alittle but in the long run, it will continue to fall till dec.
given the current exchange rate of 0.545 pounds for a dollar, selling 1,000,000 USD will 'earn' you 545,000 pounds. (so you borrow 545,000 pounds from the bank if you can do that. at a rate of 4% p.a.)
if the dollar continues to weaken 1-2% within the next 2 weeks and 3-4% within the next 2 months (my analysis).
in 2 weeks' time, if you can buy 1,000,000 USD at a rate of 0.5395 and that will cost you 539,500 pounds. so income - cost =profit. 545,000-539,500=5450 pounds.
additional cost: interest of 2 weeks for borrowing 545,000 at 4% will only cost you 839 pounds.
in 2 months' time, if you can buy 1,000,000 USD at a rate of 0.52865, that will cost you 528,650 pounds. income-cost=545,000-528,650=16,350 pounds.
additional cost: interest of 2 months for borrowing 545,000 at 4% will only cost you 3,634 pounds.
ok, so who's interested in this high-risk money venture where you can potentially earn 12,000 pounds in 2 months.
btw, currency traders do this every day. so their portfolio increases by a compunded interest of about 0.9% every day. at least that's what i think...
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