EUR/USD is headed higher, said Douglas Borthwick, head of trading at Faros Trading, a foreign exchange advisory and execution firm.
While many on Wall Street are quite pessimistic about the prospects of the euro currency, Borthwick thinks there are fundamental reasons to believe the dollar will devalue even faster.
Below are the five points of his long-euro/short-dollar thesis.
1. The US is in a weaker fiscal shape than Europe.
2. There is still plenty of ‘flight to quality’ remaining in the dollar.
3. The value of the euro is being talked down by officials from core Europe.
4. There is more to the story of Latin American/Asian central banks buying the dollar to devalue their currencies.
5. The natural course of action for the US to take is to devalue the dollar.
Clicker on “Start” to view the explanations for these five theses.