Short The Euro, Long The Dollar?

Posted by Bull Bear Trader | 4/11/2008 11:05:00 PM | , , | 0 comments »

Forbes is speculating how the "euro experiment" may come to a soon end. The problem is that each of the euro-based countries has its own unique monetary problems. Apparently there is growing tension in countries with inflationary pressures (such as Germany, Austria, and the Netherlands), and countries with growth pressures (such as France, Italy, and Spain). If countries start to break from the euro, the spiral unwinding could be hard to stop. To take advantage of a break from the euro, the author suggest shorting the euro and buying the dollar, or possibly selling investments in Italy and Spain, while buying fixed-income assets in Germany.