Hashemian Blog
Web, Finance, Technology, Running

Dollar Rally

by @ 11:49 pm
Filed under: financial,money — Tags: , , ,

The last time the euro was below $1.30 USD was over a year ago. It's below $1.30 once again. This despite the fact that the consensus had been for the US dollar to continue to be under pressure and see further declines. The fundamentals in the US haven't really changed much. There's still a monster-sized deficit and growing and there's even talk about the US spending all its income servicing debt in a few short years.

What's changed is the financial fiasco unraveling in Greece and gripping Europe by proxy. That has the investors scurrying and flying to the US dollar. It's a short term relief for the dollar where in normal conditions (in my opinion) should be trading at parity with the euro.

For now the market is nervous because it doesn't know how deep the rabbit hole in Europe goes and as usual the governments aren't saying much, lest they spook the markets even more. That has opened a short-term advantage for the dollar.

But my feeling is that the favorable period for the dollar will soon pass as Europe bites the bullet and faces the issue head-on, instead of wavering and hoping that the situation will correct itself. If the US hasn't addressed its deficit issue by then (and I see no evidence of that), the dollar will resume its slide and who knows how far the American rabbit hole will go.

No Comments »

 

* Comments are subject to Akismet and manual approval.

Powered by


Read Financial Markets  |   Home  |   Blog  |   Web Tools  |   News  |   Articles  |   FAQ  |   About  |   Privacy  |   Contact
Donate Bitcoin: 1K9TzBvQ2oaEb4tX9t2vKDtZouMcpfV6QF
paypal.me/rhashemian
© 2001-2019 Robert Hashemian   Powered by Hashemian.com