Dollar Bloodbath Continues Across Asia, Gold Tops Election-Night Spike Highs

Having plunged by the most in 6 months during the US day session, the dollar is continuing to get pounded across AsiaPac with Hong Kong Dollar and Yuan surging. Gold is extending gains, breaking above the spike highs from election night...

The Dollar Index is in free fall...This is the 7th straight down day for the USD Index...

 

There is not much support below here...

 

Driven by widespread selling across Asia... The last 3 days have seen the biggest collapse in the dollar since the start of January.

 

With the Hong Kong Dollar exploding higher (and 12mo forwards signaling expectations of a major collapse in the US dollar, breaking the Hong Kong peg)...

 

Offshore Yuan is spiking higher against the dollar...

 

But all Asian currencies are surging against the dollar tonight...

 

And gold is spiking back above the election night highs...

 

Did President Trump's "we don't need no stinking debt ceiling" decision finally break the back of dollar hegemony?

Or is this the market calling The Fed's bluff and forcing them to hike rates to defend the dollar - and by doing so losing all data-dependent credibility (whatever is left)?

Comments

aurum4040 Caloot Fri, 09/08/2017 - 01:34 Permalink

Gold backed oil futures have been discussed for years. It's nothing new. Let's see if it pans out as a success story. China has their own set of serious financial problems. And the US can easily flood the market in oil and do what it does best - crush gold futures with tons of FR member cash. The dollars days have been numbered for years, it will not go down easily. It will take much longer than most think. Even though it already has. 

In reply to by Caloot

Ranger4564 Caloot Fri, 09/08/2017 - 07:42 Permalink

No one wants to be on the receiving end of US Foreign (Alienation) Policy. Currency and blah blah are really just a representation of the amicability of nation states. The world has been patiently waiting for the US to act more humanely / maturely, but it continues acting like an asshole / childishly, so the world is having to say, Time Out, Lights Out.

By the way, the EMP threat and other rhetoric coming out of North Korea, that's really the Chinese / BRICS + friends talking, not NK. NK is just the conduit for the tit for tat exchanges between the US and the rest of the world. What the world basically said to the US is: You fucking morons, you can't intimidate the whole world, you continue with this shit and we'll EMP your ass. But in the meantime, we will move on with the asset backed currency scheme we all agreed to at Basel III.

You are right, no one wants Dollars, but it's because the US is an ass, and because the US acts dishonorably / dishonestly with their printing presses. The EU doesn't have long to live if they keep printing like the US has been. The BRICS know Japan was forced into self-destruction, so Japan will be spared the horrors and allowed to recalibrate their currency and economy.

In reply to by Caloot

Lordflin aurum4040 Fri, 09/08/2017 - 05:59 Permalink

It will take how ever long it takes. I gave up having an opinion on the subject after they broke the back of 30 dollar silver. As much as I understood even then that the markets were utterly manipulated I was not fully prepared for the open criminality nor the willingness to pull out all the stops.

Not certain if this is hubris or the 'Samson Solution' or some other combination of factors but TPTB seem determined to ride this horse into the ground... It will happen when it happens. In the mean time you have the opportunity to purchase real assets on the cheap.

In reply to by aurum4040

Yen Cross Thu, 09/07/2017 - 23:49 Permalink

  The fed needs to start cranking back the balance sheet and rates will take care of themselves.  Otherwise any rate increases are just short lived, as bonds get front run, and purchased after the rate hike. Until the money suppy is tighened to a point that induces fiscal responsibility with companies and traders, these trivial rate increases are meaningless.  This is the same fucking trade that happened last Summer.  Borrow $usd to buy euros to buy strengthening Yuan. [ hedge euro vs $usd with calls to offset currency depreciation] 

Yen Cross xrxs Thu, 09/07/2017 - 23:56 Permalink

  I agree that's not a good idea, and don't think it will happen. FWIW- China doesn't have a debt ceiling, and is also $11trillion deeper in debt than the U.S.  if people want to track Chinese productivity, just look at their industrial energy usage charts.

In reply to by xrxs

janus Yen Cross Fri, 09/08/2017 - 00:31 Permalink

do you think china will soon depeg the rmb?do you think there willl be a massive deval of the yuan in the near future?i agree with you (i think).  this looks more technical than political...no serious forexer actually believes we'll stick to a debt-ceiling, in that no serious anybody actually believes we'll stick to a debt-ceiling.  that shit is for maw & paw in omaha who want to feel certain uncle sam is balancing his checkbook.so, anyway, is this the market signaling confidence in mid-to-long-tem yuan strengthing?  or just a cycling through of pair-traded hedges?janus

In reply to by Yen Cross

Yen Cross janus Fri, 09/08/2017 - 01:29 Permalink

 I don't think there's going to be a deval. I also think people always seem to jump on trades too fa through the move and get burnt.  This is a capitulation trade in the $usd, and traders are using weather and some politics to manipulate it even lower. Just like most trends, they tend to overshoot.

In reply to by janus

wisehiney Thu, 09/07/2017 - 23:50 Permalink

Will there be the same paper sell off of all tangibles that there was last time?I have my doubts.You fuckers seem a mite more awake this time.Meet me on the other side fellers.