There is a lot of scary news today about the fate of the dollar. Personally I like a weak dollar, call me crazy, but this is the best way to bring manufacturing jobs back to the USA, where they belong. I don’t have any need for cheap Chinese goods coated in lead paint. But the Fed is playing with fire here and we are almost certainly about to hit a serious recession.
The US Dollar is now equal in value to the Canadian Dollar. Here’s more
Saudi Arabia didn’t match our latest rate cut for the first time ever signaling their intent to drop their peg. Here’s more
The Euro broke through a major support level for the first time. Here’s more
It will be interesting to see whether the loonie can keep this appreciation up. It would seem that Canada should not be able to sustain this kind of movement, considering we are there major trading partner…. I doubt it. Strong Curreny does not equal national pride either…..
Currency value is definitely linked to national pride, for those who understand it… definitely a different crowd than the “support our troops” national pride brigade. maybe people who understand it as well as you however are outside the spectrum and don’t link it to national pride. Maybe you want to explain what you mean by that?
The value of a nations sovereign credits (currency) is a bad barometer to use as a gauge of national pride. In most cases its simply a case of supply and demand from the speculative community…Maybe psychologically people equate a strong currency to national pride, but national pride certainly does not equate to a strong currency.
So the US M3 supply is too great, or we’re in too much debt, or both? Is this dollar weakness something I should be concerned about?
People are now beginning to talk about how the ECB/BOE/BOC are looking into cutting their interest rates as well. You might see some usd appreciation from this in the coming weeks. Interest rates are an excellent primer for domestic fx kinetics.