Confused

[IWalkLikeHimaMartian]

The soon-to-be-US ambassador to EU believes the euro is bound to fail soon.

The man tipped to be Donald Trump's ambassador to the European Union has told the BBC the single currency "could collapse" in the next 18 months.

http://www.bbc.co.uk/news/business-38749884

He's so convinced that he's going to "short" the euro.

Professor Ted Malloch said he would "short the euro" - taking a market position which bets on the value of the currency falling.

My understanding of "shorting" a currency, is to sell that currency at today's rate in the hope of buying it back in the future, thus making yourself a tidy little profit.

Why would anyone sell a currency that they believe is going to fail, and then want to buy it back again? Why would you want to be left holding a failing currency? Especially as you would need to be selling/shorting a fair amount of it, thus requiring you to buy back a fair amount, in order to make it worthwhile.
I don't think he understands the concept.

 

[Deleted member 63160]

I think if they're really certain they might borrow oodles of euros from a euro bank. When the euro collapses (If it does) they pay it back.........lots of variables and really risky. Maybe they know something we've not been told yet? I do think not joining the currency was a smart move for us though.

 

[Doggit]

There is a difference between the futures market, (where you buy an option to then purchase the currency at a future low price), or borrowing the Euros from an obliging trader at todays price, and then selling it when it drops, and this is what makes you're profit. The daft thing about shorting a stock or a currency, is that if you do it in large enough volumes, then that drops the confidence of the market, and becomes a self fulfilling prophecy - it's something that should be regulated, or even banned.

 

[JohnD]

The soon-to-be-US ambassador to EU believes the euro is bound to fail soon.

He's so convinced that he's going to "short" the euro.

Is he an expert in currency trading?

If he's that good, presumably he is already a multi-trillionaire.

He already thinks he knows more about how to do multilateral trade agreements than anyone else. Who knows, maybe his guesses will be right. I wonder if he shorted the Pound before 22nd June?

If he did, he must have made billions.

 

[Doggit]

Why would anyone sell a currency that they believe is going to fail, and then want to buy it back again

You'd sell it and then buy it back if you felt it was going to stabalise at some point in the future. The guy who do this aren't going on holiday with it, they're just using it as gambling money.