A Bourse Diary

Thoughts on stocks, speculation and ... life

Wednesday, May 17, 2006

Venezuela 'may swap oil currency'

I wanted to write some words about the dollar, but here first this message from Venezuela:

Venezuela 'may swap oil currency'

After the announcement of Iran to create an oil bourse traded in euro, this is the second large oil exporter to consider such option.

All the analysts and comments look in quite the same direction: this move may bring the central banks (especially in Asia) to shift greater parts of their currency reserves out of dollar into euro.

We'll wait and see...Probably, if large quantities get moved around, it will have impact on the exchange rate, though the central banks will be cautious with their re-positioning and will (try to) do it delicately.

But, what I want to point at, is: the value of a currency is not that much implied by the quasi monopoly role in the world or certain markets as suggested by the comments. We do not trade any commodity in euro or Swiss francs, nor any central bank has reserves in Swedish crones...

If there is to be some down-drift in the dollar's value, it very well may be a overshooting by speculation and will not mirror the strength of the American economy and investment attractivity.

PS: Oh, yes, there was something more: the stocks are falling somewhat... Don't care too much. Although I suppose, we haven't seen the end of the correction now, I will say this: if stocks get cheaper, they get more worth to buy. Don't forget it as sooo many, who do exactly the opposite.

Disclaimer - I do not make recommendations to buy or sell securities - I just post my thoughts, trades and opinions. Please read the disclaimer text at the bottom of the site


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Disclaimer: All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and are in no way intended to serve as personal investing advice and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Readers should not make any investment decision without first conducting their own thorough due diligence. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. While the information provided is obtained from sources believed to be reliable, its accuracy or completeness cannot be guaranteed.