basementwaj

Read these 2 amazing articles in th esunday times today... think everyone should take a look! Interesting year on its way

http://business.timesonline.co.uk/ar...879458,00.html
http://business.timesonline.co.uk/ar...879453,00.html

Chandler

So, the first article warns how the experts got it wrong and then asks other experts to predict the future. Hmmm...

Do they really no more than us or is guess work and luck the best way to go?

bbb1969

You guys have to watch euro / dollar, if we take out 1.1930 again, then we have a major reversal pattern on our hand, ie, the dollar down trend could resume, and the dollar sold off in dramatic fashion.

And a basket of high yielders would move higher playing the carry trade, all bets of; Bunds and US Tresuries rally across the board.

Watch this space.

Chandler

You kind of lost me half way through, but what I think you are saying is that Liverpool are going to win the Champions League back to back.

I'll go put some money on at the bookies...

bbb1969

Yes i agree, i'm also a mad Liverpool fan, and watch then win the prem lge.

franc11s

History on the HUGE, no MAMMOTH Deficit.... Don't look at the small picture. I am NOT saying the USA will default but it can't just keep printing money... and doing nothing about the deficit which in my oppinion, given expected growth (or lack of) next year could spell some real sh*t... Just my view... each to his / her own.

bbb1969

Foreign asian central banks are buying up US Treasuries in a mean way, IOU, how ever the strength of the far eastern economies, strong GDP, central bank reserves, longer term will cause a major crisis for any economy which is dependent on any out side enity's proping up its economy, the only soloution economists can see or practice in theory is a devaluation of the national currency, there is an excellent book called the "Dollar crisis" worth purchasing, also Bob Rubin wrote a very interesting book last year again, a great in sight in to Wall St.

Personally i feel the green back will fall in the months and years to come looking at the bigger picture.

BigDavyG

Ok, serious question here then.
I came here with the intention of staying 4/5 years then moving back to the UK.
At the current £/$ rate I'm off the opinion that there is more scope for the dollar to fall than rise - £1-$1.50 is a realistic floor, but the ceiling could be in excess of 2/1.
So right now I'm ok with the current rate and would like to be able to lock this in for the rest of my time here. How can I go about this given that most of the cash I'd like to bring back to the UK I don't have yet, as I'm still to earn it.

Thanks

bbb1969

OK,

Lets gets this the right way round, the dollar to fall, actually means for it to go towards 190/200.

You want to lock the current price in, as i write the spot is 1.7148.

So you want to sell dollars and buy pounds.

We call this a trade a "Forward Outright", and you can determine the date and amount going from 7 days to 5 years.

You must be able to cover for at least 35% of the trade if you are looking to do a five year forward to allow for currency movements before you take physcial delivery and a comfort zone for the bank.

So after 5 years if you expect to earn or have $500k and want to purchase sterling the institution will want a comfort zone, so you will need to have a least $175k US on deposit, simply because five years is a long time.

At the end of your term you get your sterling and the counter party gets the US dollars.

If you want the money early you will have to pay the forward interest points which will be high on a five year trade, this i can not explain on the net, its a little technical.

i hope this is of help.

BigDavyG

Cheers BB
A few years back I worked for a firm who produced software for options and fx traders so I have some rudimentary knowledge of the theory, but what I'd like to know now is who does a regular punter like myself contact to instigate such a trade ?? Can I set this up with my bank or do I need to approach a trading house.
Btw thanks for the info on the downpayment - I wasn't sure how that would work but if its 35% I guess that it'll be a few months before I get this oneoff the ground

bbb1969

Well i'm only saying 35% because your are looking at a 5 year bet.

open a dollar and sterling account in london.

phone the trading desk directly and ask them that you want to sell dollars,

we say half a dollar in the trade and buy cable, cable is the name for pound sterling, on a the date you require.

other wise, you can simply things,

log onto www.hifx.com

good people, fair advice.

BigDavyG

Who do you open the trading account with though - sorry if this is a daft question ???

bbb1969

not at all!

lets say you open a account with barclays,

you hold a short call currency account in sterling and dollars,

ask to open a short call currency call deposit account, so you earn interest.

then you call barclays capital for example, go through to the trading desk directly, and do your trade.

sell dollars and buy pounds.

or open an account with a broker like hifx, but this is at your own risk, it is best you are a 100% sure when working with a small broker, compared to a high street bank.

BigDavyG

Right, so do you think that I could do this through my friendly neighbourhood citibank or do i need to head to a bigger bank downtown.

Last question - i promise

bbb1969

Yes and no, they will put your through the middle market operation of citigroup global markets which in effect is Smith Barney.

I would prefer a UK bank, HSBC have a presence in Fl.

Also RBS, own Citizens Bank.

I'm not sure how Citis retail operation works in the state, but if you have a net worth of 0.5 to 1.0m USD, you should really have an account through Private Banking, you will get first class service, and make your money grow.

Try UBS, Deutsche, or Credit Suisse, from the UK HSBC are KING

Also try BB&T bank in the US, a good bank, Bank of America & Wachovia Securities.