"Profit from your knowledge!"
The Bull Bear Trader discusses market events and news with an interest in understanding risk and return in both bull and bear markets. Discussion topics include trading and hedging strategies, derivatives, risk management, hedge funds, quantitative finance, the energy and commodity markets, and private equity, as well as an occasional investment opinion.
Friday, April 11, 2008
Short The Euro, Long The Dollar?
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.
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