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Tuesday, May 31, 2005

French voters buy dollars 

By TigerHawk at 5/31/2005 08:52:00 AM
Thanks to the big "non" on Sunday, the dollar is up to 0.81 Euros this morning, which is its highest level since last summer. The World's Greatest Currency is up 10.5% against the Euro since the beginning of this year, and 5% since the New York Times shorted the dollar ("The dollar is heading down, no matter what").

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2 Comments:

By Blogger geoffrobinson, at Tue May 31, 09:18:00 AM:

This bodes ill for Warren Buffet who has put a ton of money into shorting the dollar.

Good business person. Bad economist.  

By Blogger Cardinalpark, at Tue May 31, 12:50:00 PM:

I wouldn't be so optimistic as to say the French bought dollars. However they clearly sold euro. Their problem, I think, is that they long for the Franc, rather than either Euro or dollars. And that is no longer a fungible commodity. Classic French longing for something they can't have, is obsolete and which reflects parochial thinking.

As for Mr. Buffett, we need not shed a tear for him. He is a great investor, and portfolio allocator. And he rightly concluded he needed to diversify Berkshire out of dollar assets. As he will do it slowly over an extended period of time, he will likely own the euro at parity over time. It will cost him near term, however.  

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