The Dollar Is Collapsing

The last four days have seen the US Dollar plunge 2% - the biggest drop since June 2016...

https://www.zerohedge.com/sites/default/files/inline-images/20180115_USD1.png

As the chart suggests, there is a key driver of the dollar's moves. China's FX policy!

One might argue that the Renminbi has been a more stable store of value to the Dollar in recent months.

https://www.zerohedge.com/sites/default/files/inline-images/20180115_dollar.png

The dollar is now pushing precariously close to its weakest since January 2015.

https://www.zerohedge.com/sites/default/files/inline-images/20180115_USD2.png

USDJPY is plunging (as Yen strengthens) which suggests The BoJ better do some more ETF buying...

https://www.zerohedge.com/sites/default/files/inline-images/20180115_USD6.png

The Dollar weakness is dragging the Euro higher, entirely decoupled from rate-differentials (once again)

 

https://www.zerohedge.com/sites/default/files/inline-images/20180115_eur1.png

 

And at the same time, hedge funds and other speculative investors have amassed the heaviest long positions on the euro ever, according to the latest CFTC data.

 

https://www.zerohedge.com/sites/default/files/inline-images/20180115_eur2.png

The Group-of-10’s best currency in 2017 is getting fresh momentum from the prospect of a September end to European Central Bank stimulus and an upswing in growth.

And as The Dollar Index plunges, so Emerging Market FX strengthens...

https://www.zerohedge.com/sites/default/files/inline-images/20180115_USD4.png

Led by a resurgence in the Mexican Peso, MSCI EM FX Index is now at its strongest since 2011.

 

Comments

IH8OBAMA Truther Mon, 01/15/2018 - 14:13 Permalink

The more the Dollar falls, the more expensive are Chinese goods.

The more the Dollar falls, the more competitive are U.S. goods prices world wide.

The more the Dollar falls, the more it will spark a gold rally for all you PM holders.

The more the Dollar falls, the more your international investments will appreciate.

The more the Dollar falls, the more expensive is an overseas vacation.  So vacation in the U.S. of A.

Let it fall, let it fall, let it fall.

 

In reply to by Truther

Hugh_Jorgan The_Juggernaut Mon, 01/15/2018 - 19:32 Permalink

I'd love to, but things cost WAY too much, RIGHT NOW! The World Reserve buffer is the only reason that the Fed has been able to keep adding all those extra zeros that have floated the past decade's money bubble. We're about to start seeing the effects of that massive dilution affecting the buying power of the USD in a very real way. I'm pretty concerned what prices will do to household goods and fuel prices over the next 5 years as a result. What vehicle allows me to hedge there? Please don't say crypto-currency.

In reply to by The_Juggernaut

IH8OBAMA Dsyno Mon, 01/15/2018 - 14:29 Permalink

Wheat, corn etc.  Manufacturing will come back as the dollar falls.

P.S. The Dollar is falling because the Trump administration wants it to fall just for those very benefits I mentioned above.

U.S. manufacturing is almost $2 Trillion.  Almost back to where it was before Obama took over.

 

In reply to by Dsyno

napper IH8OBAMA Tue, 01/16/2018 - 02:28 Permalink

Fiction. A big chunk of the US industrial base has been hallowed out. The big ticket items are mostly military hardware, for which many restrictions apply. Worse, over the years those restrictions have had the curious effect of driving up foreign research and development spending, resulting in rival products on the international market -- fighter jets, bombers, drones, tanks, missiles, high-bypass-ratio engines, submarines, destroyers, cruisers, even carriers.

 

US military technology is being caught on and superseded rapidly.

In reply to by IH8OBAMA

dinkum IH8OBAMA Mon, 01/15/2018 - 15:17 Permalink

IH8OBAMA, replace "falls" with "increases" and you would be more in line with  old-time orthodox buy side of sales economists such as Benjamin Graham and David Dodd. 

Modern Monetary Theory likely would be alarming to seniors on fixed incomes if they understood they vote for lawmakers on the sell side of sales. 

 

 

 

 

In reply to by IH8OBAMA

dinkum rejected Mon, 01/15/2018 - 15:46 Permalink

rejected, aside from using the antonym "fall", the world would be ours if Steve Mnuchin early press conferences upon being appointed US Sec of the Treasury re issuing 100 yr to 50 yr T-Bonds.

"The current 50-year swap rate in the US, which is closely linked to Treasuries, is about 3 basis points below the 30-year swap rate, suggesting that a 50-year bond could be cheaper for the government to issue than the current 30-year bond, said Mr O’Donnell."

In reply to by rejected

MK ULTRA Alpha IH8OBAMA Mon, 01/15/2018 - 18:30 Permalink

A weaker dollar, around 20% weaker than present value would be good for the USA. Thanks for explaining about it, you saved me from writing an essay.

We need a weaker dollar, it throws our opponents out of sync. Each time the dollar fluctuates against global currencies it costs millions of jobs. This has been proven many times, written about, researched, - dollar fluctuations causes aeconomic damage and this is the down side caused from being world reserve currency. 

Millions of jobs are lost each time the dollar moves from a low value period to a high value period. A good example and there are many, is the domestic hydrocarbon industry, a weak dollar means a higher price in dollars for petroleum products, the oil produced in the US is a higher price in dollars. Thus, they receive more dollars for their production. That's just one example, and there are millions of examples of the benefit of a weaker dollar vs a strong dollar. Right now, we need a weak dollar.

In reply to by IH8OBAMA

pods GeezerGeek Mon, 01/15/2018 - 14:34 Permalink

That reminded me of that whole third world shithole thing. WTFF (What the Flying Fuck) is up with that?

Even if he did say that, is it not true?  They are third world shitholes.

Do this little exercise, start saying a sentence that starts with third world and is followed by an adjective. What rolls off your tongue?
"Third world........"

To me, it's either shithole or hellhole.  Paradise?  Nah.  Shithole is what comes naturally. 

Now they are beating him up about it being racist.  "Third world shitholes" is not a racist term by default. The fact that most if not all third world shitholes are made up of certain demographics is not the fault of those pointing out the shitholiness of those places. It's the fault of those making it a third world shithole.  Look at Haiti and the Dominican Republic.  Same island, yet one side looks like Easter Island without the statues.  Why?  Because they chopped down every GD tree around.  Is it racist to point it out that if you cut down every tree around you won't have any left?

It's racist to think that inherently one race is "better" than another.  I am a racist. Asians are better at math, blacks at running and jumping, and white Europeans at building civilized societies.  But calling a spade a spade is not racist. (or a duck a duck if you are a snowflake) 

Namby pamby reporters are running around trying to stir up shit about "he's a racist, he's a racist" when they very well know that inside they are too.  Everyone is.  It's natural. Just like pointing out that a third world shithole is a third world shithole.

Ahhh, I feel much better now.

pods

 

In reply to by GeezerGeek

MoreFreedom pods Mon, 01/15/2018 - 14:55 Permalink

I'm sick of the faux outrage over this.  It was more outrageous to leak the quote and also to publish it.  The MSM used to pass on such use of expletives by politicians in closed meetings.  And the MSM uses their own expletives in talking about it, showing their hypocrisy.  Frankly, everyone agrees, many of those countries are s***holes.

Besides, your post is off subject.

In reply to by pods