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bei 1,3452 gegangen (in Cash). Ist mir egal, ob der Dollar noch weiter fällt. Der Artikel unten ist von einem US-Bond-Spezialisten (die sind ja meist intelligenter als Aktien-Gurus, weil einfach viel mehr Anlegergeld in Bonds steckt). Fette Hervorhebungen sind von mir. Wichtig ist insbesondere der Rückfluss von Kapital, das US-Firmen im Ausland verdient haben, in die USA, weil dies 2005 aufgrund eines neuen (nur für 2005 geltenden) Gesetzes Steuervorteile für US-Firmen bringt. Die dadurch "reimportierte" Summe liegt bei einer Drittel Milliarde (US: Trillion) Dollar. Dies wird den Dollar nachhaltig stützen. Wichtig ist weiter die für 2005 und 2006 erwartete Budget-Disziplin (!) der Bush-Regierung. Nicht zuletzt wird eine Steigerung der Zinsdifferenzen durch weitere US-Zinsanhebungen den "Short-Dollar-Carry-Tradern" die Suppe versalzen.
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Dollar's Decline Set to Slow in 2005
By Tony Crescenzi
12/22/2004 7:23 AM EST
# The odds seem good that there will be no calamity in the dollar.
# If anything, the seeds for a reversal are being sown.
# In particular, investors will respond to data that show the budget
deficit falling in 2005.
A multitude of factors that have contributed to the three-year decline in the value of the U.S. dollar are likely to reach inflection points in 2005, making it likely that the dollar's decline will either slow or halt. In particular, perceptions in the financial markets about the long-term trajectory of the U.S. budget deficit almost certainly will improve. Investors will respond to data that show the budget deficit falling in 2005 and to clear indications from the Bush administration that it plans a fiscally austere budget for 2006.
Other factors that will help to stabilize the dollar include:
* Increased foreign direct investment in the U.S.
* Strong growth in U.S. exports
* Reduced speculative fervor
* Higher relative interest rates and economic growth compared to the rest of the world
* A new tax incentive designed to encourage U.S. companies to return profits earned
abroad to the U.S.
These factors make the bear camp's doomsday dollar implosion seem far-fetched.
Budget Deficit on Downward Path
To the foreign investor, America's twin deficits -- its nearly $1 trillion budget and trade deficits -- justify bearishness on the U.S. dollar because these deficits require a steady flow of foreign capital into the U.S. So far, the U.S. easily has attracted the foreign capital it needs to finance the deficits. The vigorous growth rate of the U.S. economy has been enormously alluring, with investors expressing their confidence in the prospects for the U.S. economy and its financial markets. Still, the rapid increase in both deficits has been unsettling to investors, and this has underpinned the dollar's weakness. It will take evidence of a bottoming in these deficits to stabilize the dollar. This evidence looks likely to surface in 2005.
The budget deficit is already on a downward track: The record $412.55 billion deficit of 2004 was much less than the roughly $500 billion deficit that most analysts and the nonpartisan Congressional Budget Office expected at the start of the year. The lower-than-expected deficit illustrates how the growing U.S. economy will help reduce the U.S. budget deficit going forward, as revenue is expected to continue to grow solidly in 2005.
The revenue growth will be accompanied by sharply slowed growth in government spending. Discretionary spending will increase just 0.5% in 2005, as set in the 2005 budget recently passed by the Congress and signed by President Bush. Still more fiscal austerity appears to be in the offing for 2006, judging by recent remarks by the president. Bush has indicated on several occasions that he will submit a "tough budget" for 2006.
The president and Treasury Secretary Snow have made it clear that they are serious about reducing the budget deficit. They also have signaled that they are aware of the importance of the issue to the financial markets, chiefly the foreign exchange market. President Bush admitted as much in his Dec. 20 press conference at the White House when he said that the budget will "send a signal to the financial markets."
Treasury Could Claim Dollar Is 'Strong,' Despite Its Fall
The U.S. Treasury Department could use any stability in the dollar to clarify what it means when it says that it wants a "strong dollar" by telling the public that it believes that the dollar remained "strong" even as it fell over the past three years. The fact is, the dollar did in fact remain "strong" because it steadfastly remained the world's reserve currency and because the U.S. continued to be seen by foreigners as an attractive place to invest. That the dollar did fall is not as important as the fact that it remained in such high demand.
The financial markets might be more receptive to this viewpoint when the dollar shows signs of stabilizing. The Treasury might want to forward this perspective to show that it has remained attuned to the long-term fundamentals that underlie the value of the U.S. dollar all the while, even as short-term anxieties developed in the financial markets. It's in the Treasury's interests to encourage such a focus on long-term fundamentals.
New Tax Break Will Bring Dollars Home
One intriguing factor that will support the dollar in 2005 is the recent legislation reducing the tax on foreign earnings. U.S. companies that earn money abroad can return their profits to the U.S. at a reduced tax rate of 5.25% instead of the previous rate of 35%.
The tax break will last for a period of one year and many large companies already have said that they plan to tax advantage of the break. The law was designed to spur investment and hiring in the U.S., and participating companies must have a "reinvestment plan" for any monies that they return to the U.S. There are nearly a half-trillion dollars of foreign earnings that are subject to the temporary law, and many billions already have been committed.
Speculating on Dollar Getting Costly
With fundamentals for the dollar improving into 2005, the speculative fervor against the dollar is likely to wane, particularly in light of the increasingly unfavorable financing costs of speculating against the dollar. Speculators now incur negative carry on short dollar positions owing to the Federal Reserve's interest rate hikes. The raises have pushed U.S. short-term interest rates above those of much of the rest of the world, and these yield spreads are likely to widen further in 2005.
Speculators will withstand the pain of negative carry only if they are confident in scoring fast. Improving fundamentals will reduce the downward bias in the dollar and thus, speculative betting against it. U.S. long-term interest rates also are higher than rates abroad; the U.S. 10-year yields 58 basis points more than the German 10-year, the widest yield spread in about four years. The wide spread will make U.S. bonds attractive relative to foreign bonds, giving impetus to buy dollars.
Elections in Iraq, Palestinian Territories
Geopolitical factors are by nature unpredictable, but 2005 will begin with a chance for improvement in perceptions of geopolitical risks. Elections in January in both the Palestinian territories and in Iraq might sow the seeds for a change in the dynamic in the two distressed lands, although changes there will be a long process, not an event. Still, on a relative basis, 2005 could end better than it begins in the two lands and this could help to reduce some of the impetus for dollar selling.
U.S. Companies Will Get Bought on the Cheap
Mergers and acquisitions of U.S. companies by foreign entities are likely to increase in 2005 as foreign companies take advantage of the dollar's cumulative decline. Foreign direct investment, or FDI, in the U.S. has been weak in recent years but has started to turn. In 2000, FDI was $181 billion but the tally fell to $87.5 billion in 2001 and $22.2 billion in 2002. It was just $9.5 billion in 2003. As we near the end of 2004, FDI has more than doubled. The trend seems likely to continue in 2005.
Trade Deficit to Stabilize
U.S. exports are likely to accelerate next year, and a gain of about 15% or so seems probable. (Gains averaged about 13% on a year-over-year basis over the past 10 months.) This won't necessarily mean that the trade deficit will decline, of course, owing to the strong growth rate in U.S. imports. But with import prices set to increase above the 10-year high of 3.4% seen over the past year, import growth is likely to slow. Much depends on oil of course, but the dollar's impact on import and export prices favors a stabilization of the U.S. trade deficit and a decline when expressed as a percentage of gross domestic product.
In a global market such as the foreign exchange market, there are innumerable factors in play. Despite this, the factors most likely to affect the value of the U.S. dollar in 2005 are prominent. In light of the above, the odds seem good that there will be no calamity in the dollar, as some in the bear camp believe. If anything, the seeds for a reversal are being sown, even if that reversal will be delayed a bit longer.
------------------------------------
Dollar's Decline Set to Slow in 2005
By Tony Crescenzi
12/22/2004 7:23 AM EST
# The odds seem good that there will be no calamity in the dollar.
# If anything, the seeds for a reversal are being sown.
# In particular, investors will respond to data that show the budget
deficit falling in 2005.
A multitude of factors that have contributed to the three-year decline in the value of the U.S. dollar are likely to reach inflection points in 2005, making it likely that the dollar's decline will either slow or halt. In particular, perceptions in the financial markets about the long-term trajectory of the U.S. budget deficit almost certainly will improve. Investors will respond to data that show the budget deficit falling in 2005 and to clear indications from the Bush administration that it plans a fiscally austere budget for 2006.
Other factors that will help to stabilize the dollar include:
* Increased foreign direct investment in the U.S.
* Strong growth in U.S. exports
* Reduced speculative fervor
* Higher relative interest rates and economic growth compared to the rest of the world
* A new tax incentive designed to encourage U.S. companies to return profits earned
abroad to the U.S.
These factors make the bear camp's doomsday dollar implosion seem far-fetched.
Budget Deficit on Downward Path
To the foreign investor, America's twin deficits -- its nearly $1 trillion budget and trade deficits -- justify bearishness on the U.S. dollar because these deficits require a steady flow of foreign capital into the U.S. So far, the U.S. easily has attracted the foreign capital it needs to finance the deficits. The vigorous growth rate of the U.S. economy has been enormously alluring, with investors expressing their confidence in the prospects for the U.S. economy and its financial markets. Still, the rapid increase in both deficits has been unsettling to investors, and this has underpinned the dollar's weakness. It will take evidence of a bottoming in these deficits to stabilize the dollar. This evidence looks likely to surface in 2005.
The budget deficit is already on a downward track: The record $412.55 billion deficit of 2004 was much less than the roughly $500 billion deficit that most analysts and the nonpartisan Congressional Budget Office expected at the start of the year. The lower-than-expected deficit illustrates how the growing U.S. economy will help reduce the U.S. budget deficit going forward, as revenue is expected to continue to grow solidly in 2005.
The revenue growth will be accompanied by sharply slowed growth in government spending. Discretionary spending will increase just 0.5% in 2005, as set in the 2005 budget recently passed by the Congress and signed by President Bush. Still more fiscal austerity appears to be in the offing for 2006, judging by recent remarks by the president. Bush has indicated on several occasions that he will submit a "tough budget" for 2006.
The president and Treasury Secretary Snow have made it clear that they are serious about reducing the budget deficit. They also have signaled that they are aware of the importance of the issue to the financial markets, chiefly the foreign exchange market. President Bush admitted as much in his Dec. 20 press conference at the White House when he said that the budget will "send a signal to the financial markets."
Treasury Could Claim Dollar Is 'Strong,' Despite Its Fall
The U.S. Treasury Department could use any stability in the dollar to clarify what it means when it says that it wants a "strong dollar" by telling the public that it believes that the dollar remained "strong" even as it fell over the past three years. The fact is, the dollar did in fact remain "strong" because it steadfastly remained the world's reserve currency and because the U.S. continued to be seen by foreigners as an attractive place to invest. That the dollar did fall is not as important as the fact that it remained in such high demand.
The financial markets might be more receptive to this viewpoint when the dollar shows signs of stabilizing. The Treasury might want to forward this perspective to show that it has remained attuned to the long-term fundamentals that underlie the value of the U.S. dollar all the while, even as short-term anxieties developed in the financial markets. It's in the Treasury's interests to encourage such a focus on long-term fundamentals.
New Tax Break Will Bring Dollars Home
One intriguing factor that will support the dollar in 2005 is the recent legislation reducing the tax on foreign earnings. U.S. companies that earn money abroad can return their profits to the U.S. at a reduced tax rate of 5.25% instead of the previous rate of 35%.
The tax break will last for a period of one year and many large companies already have said that they plan to tax advantage of the break. The law was designed to spur investment and hiring in the U.S., and participating companies must have a "reinvestment plan" for any monies that they return to the U.S. There are nearly a half-trillion dollars of foreign earnings that are subject to the temporary law, and many billions already have been committed.
Speculating on Dollar Getting Costly
With fundamentals for the dollar improving into 2005, the speculative fervor against the dollar is likely to wane, particularly in light of the increasingly unfavorable financing costs of speculating against the dollar. Speculators now incur negative carry on short dollar positions owing to the Federal Reserve's interest rate hikes. The raises have pushed U.S. short-term interest rates above those of much of the rest of the world, and these yield spreads are likely to widen further in 2005.
Speculators will withstand the pain of negative carry only if they are confident in scoring fast. Improving fundamentals will reduce the downward bias in the dollar and thus, speculative betting against it. U.S. long-term interest rates also are higher than rates abroad; the U.S. 10-year yields 58 basis points more than the German 10-year, the widest yield spread in about four years. The wide spread will make U.S. bonds attractive relative to foreign bonds, giving impetus to buy dollars.
Elections in Iraq, Palestinian Territories
Geopolitical factors are by nature unpredictable, but 2005 will begin with a chance for improvement in perceptions of geopolitical risks. Elections in January in both the Palestinian territories and in Iraq might sow the seeds for a change in the dynamic in the two distressed lands, although changes there will be a long process, not an event. Still, on a relative basis, 2005 could end better than it begins in the two lands and this could help to reduce some of the impetus for dollar selling.
U.S. Companies Will Get Bought on the Cheap
Mergers and acquisitions of U.S. companies by foreign entities are likely to increase in 2005 as foreign companies take advantage of the dollar's cumulative decline. Foreign direct investment, or FDI, in the U.S. has been weak in recent years but has started to turn. In 2000, FDI was $181 billion but the tally fell to $87.5 billion in 2001 and $22.2 billion in 2002. It was just $9.5 billion in 2003. As we near the end of 2004, FDI has more than doubled. The trend seems likely to continue in 2005.
Trade Deficit to Stabilize
U.S. exports are likely to accelerate next year, and a gain of about 15% or so seems probable. (Gains averaged about 13% on a year-over-year basis over the past 10 months.) This won't necessarily mean that the trade deficit will decline, of course, owing to the strong growth rate in U.S. imports. But with import prices set to increase above the 10-year high of 3.4% seen over the past year, import growth is likely to slow. Much depends on oil of course, but the dollar's impact on import and export prices favors a stabilization of the U.S. trade deficit and a decline when expressed as a percentage of gross domestic product.
In a global market such as the foreign exchange market, there are innumerable factors in play. Despite this, the factors most likely to affect the value of the U.S. dollar in 2005 are prominent. In light of the above, the odds seem good that there will be no calamity in the dollar, as some in the bear camp believe. If anything, the seeds for a reversal are being sown, even if that reversal will be delayed a bit longer.
