You remember the previous topic talking about the fact USD was getting weaker? Forget it now. Since few days on the FOREX market, the dollar is now getting stronger, and this, against the Australian dollar (+2% in 6 days), against the Euro (+1.3%), against the Yen (+0.7%), against the Sterling (+1.9%) and against the Canadian dollar (+0.4%). Well, I think now you got it pretty straight away. This is statistics based since Friday September, 18, or in other words, the next day after the Federal Reserve decision. The dollar, despite the low interest rates and the little weakening in Thursday, is now getting stronger steadily. Driving down precious metals along the way. What do you think of this even stronger dollar? Why? Why does it happen? And Fed cares about this stronger dollar?
I would think news like http://www.shanghaidaily.com/busine...y-hits-78month-low-in-September/shdaily.shtml and the slowing Chinese economy are contributing factors to the strength of the US dollar. It shouldn't be a surprise that Australia is suffering a bit as miners' exports to China have declined. The problems of VW are affecting the DAX that in turns impacts Europe; the immigration costs are impacting European government resources. Relatively speaking, even though the Fed's measures justifying a rate increase are pitiful, the USA represents a flight to safery. Just opining...
Not so badly said. In your opinion, to summarize in general, the US dollar is higher because, well, it is the economy doing more well than Asian countries, Australia (affected by the China slowdown), and Europe combined? Basically, the US dollar is not getting stronger, but rather all these currencies are getting weaker, making the US dollar stronger by the way. That's a good point I didn't thought of before you talked about it. I think the China slowdown does help the rate between Japan & Australian currencies, but honestly, US markets is affected as well of this China slowdown. I don't know why it feels less affected than other countries, but I think they are, given Wall Street reaction at each slowdown announcement.
I would agree with baudwalk as well, it seems more like a weakening of other currencies than a strengthening. That said, the US economy is not as strong as it seems, and though it might have been nice to increase interest rates, I believe that it would have likely had a bad effect consumer confidence in the long term.
Thanks for the input. I didn't mention the BRIC economies are in the tank, plus Canada. And the NHK business news segments prior to the Fed's meeting mentioned significant amounts of money were being drawn out of the Japan or Korea markets in anticipation of seeking a better ROI here. No matter how you parse the global economic data, it seems that it is more a matter of who is the least worst off; the USA is it, in my opinion, and therefore a flight to safety to here. It's not wonderful but...
I think this long term rise of the dollar has more to do with weakness in Asia/Europe rather than strenght in the USA. And by long term I mean the rise of the USD during the past months. These small daily fluctuations are nothing but noise to me, one day it's up, another day it's down, you can't see a trend in a 2 day window. (well at least I can't)
I can't draw long-term trends with 6-days data, I agree with you, but this period is special: Thursday 17, there was the Fed announcement and I remember from that day that the dollar was getting weaker, and suddenly, as soon as the next day, the dollar was getting stronger, despite a lot of predictions thinking that keeping the interest rates would automatically make the dollar weaker, because more money would be available to banks etc. and since, it didn't stopped. So I may believe easily in the theory of other countries getting weaker, and of the United States looking not bad for investment, but I find this a bit ironic, because it goes unexpected.
The price of the dollar fluctuates up and down all the time, and if people hadn't talked about it dropping, they wouldn't now be talking about it getting stronger. Give it a few weeks and the talk will be on how's it falling again so to be honest until it starts to affect me personally I'm happy to let it do what it wants.
I just looked through to see since when the dollar did not reached this level, and when it comes to the Japan's Yen, USDYEN is at its highest since 2007, and for USDEUR, it is at its highest since 2003. So, even if I base it on a quick look on two currencies, it seems to confirm dollar seriously got stronger lately. And dollar got a sharp rise from the Q3 2014. I don't remember news at that time so I don't know why it happened, but this rise happened in both USDYEN and USDEUR. Since then, the rise isn't that sharp, but I feel like dollar will continue to get stronger in the future, especially with what Federal Reserve is doing. But it seems Federal Reserve does not have the exact expected results on the currency.
