Repatriation of Capital EUROs and Dollars

Does any follow capital repatriation? I here about it all the time from the media and blogs. I want to know where they get their research. I see it, so to speak, on the charts. Currently, May 2012, there is huge dollar repatriation. The dollar index is 82.29 as of writing, treasury yields are very low, and treasury futures are at their highs.

Thanks for your help.

I saw on BLoomberg the CEO of FX Concepts talk about repatriation of capital, or the movement of capital. He said Greeks had been moving their money for several years. He also said the dry bulk shipping companies were moving their money out of Greece as well. I follow the dry bulk shippers. DRYS, dry ships, it is an ok compay and when the world was growing their stock was near $80. I made a bunch of money from that stock. Now, it is worth $3.

I'm guessing there has been some movement of money in the last couple of days. Today and yesterday the EURO has moved higher and so did the EURGBP. Some bank selling their GBP for EUR. You're not going to find 100 Billion EUR between the sofa cushions.

Could just be a short covering rally though.

Hi, just cause something is going up/down doesn't mean it's capital repatriation. For example in May you got a whole bunch of risk aversion flows. Some may have been capital leaving euro-denominated assets and going into safe havens such as USD or Yen denominated assets. This capital may or may not have been repatriation - depends on its source (e.g. was it originally from the US or is it Asian capital being reallocated to the US?) Some was people short selling the euro (the number of open contracts (net short) on euro is at a record high); likewise speculative dollar longs. And so on and so forth.

In March (and possibly earlier) there was a lot of talk of repatriation flows into the euro as banks deleveraged, selling foreign assets and repatriating the cash into their home currency. It was one of the reasons typically given for the euro's strength during that time, as well as reserve diversification.

Here's a decent article regarding euro repatriation. I don't agree/disagree/have an opinion. Only posting it.

http://www.moneyandmarkets.com/this-...-support-49550

Kind Regards.

Thanks for the posts.

Anyone care to add some insight to this? This is from Forexlive.com. This was posted after a large move in the AUDUSD, AUDJPY, and EURAUD.

"Investors fleeing the euro in droves

Written by Jamie Coleman
June 18, 2012 at 17:23 GMT

How do we know? These wonky moves seen to come at the top of the hour, a time when US real money accounts are able to deal on a published rate.
There are fixings virtually every half-hour around the clock these days, but the bulk of the business gets done at the Tokyo fixing, the early London fixing at 11:00 GMT, the ECB fixing at 12:15 GMT and the late London fixing at 15:00 GMT.
But as we just saw, quite heavy EUR/AUD flows just went through at 17:00 GMT.
What we can take away from all this is that money mangers are getting out of euro-denominated investments in a big way. They were sellers into strength last week and they are selling into weakness this week. Looks like Australia is taking a good bit of the safe-haven flow given recent price action. With rates poised to head lower in that country, it’s a hot-money paradise for bond traders…"

If the news is correct and Moody's does downgrade bank stocks this should cause a dollar rally. Banks will need to have more capital, insurance companies will need to have more capital. Also, it could change where insurance companies and banks invest their money. People, like me, who are not happy with their bank, will have more motivation to put money into credit unions.

This adds more fuel to the fire.

Watching the EURAUD you can see that money is flowing into the AUD. I read on Forexlive or on Zerohedge that middle eastern accounts are buying AUD and selling EURO's. I would love to know where people get this information.

With the deposit rate at zero I think we should see more selling of EURO's. Although I can't believe people are buying AUD. If there is a global slowdown, the AUD will get hit hard.

How do people make these claims? How do you research this stuff.

from http://seekingalpha.com/article/7605...lapse-and-soon

by James Woods


"Here is what is relevant. Enormous transfers of money are being made that vastly increased loans to nations that cannot pay them. Here is a summary of what happened in the last year, most of which the public does not know: Worried depositors in southern nations banks have withdrawn their deposits from the southern national banks and taken them elsewhere, particularly Germany. This left German banks with lots of money to lend, but they had such excesses that the German Central Bank deposited (lent) about 400 billion euros to the ECB last year. The ECB turned around and lent 275 billion euros to Italy, which previously did not have any debt with the ECB. Furthermore, the ECB lent 350 billion euros to Spain, which previously only owed 50 billion euros. When it is recognized the southern European nations cannot repay the ECB, the ECB is broke. When the ECB is broke, those who lent monies to the ECB are broke. While we cannot say when the ECB and the northern European countries will stop lending to the southern European nations, we can assure readers the northern nations will stop lending, be it this year or the next year or so. This is not a printing press issue without consequences. This is a solvency issue where each nation must protect its own financial survival."