Why is the U.S.Dollar heading south?

[topt]

USD

The dollar’s downtrend took it to January 2015 lows against a currency basket and to a range of multimonth lows against peers from Japan, Europe and Canada. The week started on a subpar note for U.S. manufacturing. The risk is that the sluggish streak for the U.S. economy results in a lackluster U.S. jobs report on Friday. Underwhelming news on America’s economic MVP would boot further into the future the timing of a Fed rate and cause the dollar’s losses to accelerate.

XE.com currency comments from last nights daily email commentary for what it is worth..........

[Naam]

USD

The dollar’s downtrend took it to January 2015 lows against a currency basket and to a range of multimonth lows against peers from Japan, Europe and Canada. The week started on a subpar note for U.S. manufacturing. The risk is that the sluggish streak for the U.S. economy results in a lackluster U.S. jobs report on Friday. Underwhelming news on America’s economic MVP would boot further into the future the timing of a Fed rate and cause the dollar’s losses to accelerate.

XE.com currency comments from last nights daily email commentary for what it is worth..........

what ever reasons for the "downtrend" exist, fact remains that the US-Dollar is the preferred currency for investors who require the highest possible choice available.

[Hardie]

When oil goes up, dollar goes down: one reason...

[2fishin2]

The dollar drops a single baht over the course of 6 months and the world is falling in. Didnt any of you take statistics or learn how to follow a trend line?

[CaptHaddock]

In Q4 of 2015 the US economy grew 1.4%, which is relatively good compared to Europe and Japan and considering the lasting effects of the 2008 crisis. So, the FED raised short-term interest rates in December for the first time in nearly 10 years. So, foreign investors began accumulating dollars in anticipation of further economic progress that would be followed by higher interest rates. Contrary to those expectations the US economic growth slowed in Q1 2016 to 0.4%. So, the FED decided not to increase short-term rates for the time being out of fear of slowing growth even further. The currency market has absorbed that information, marking the dollar down against many other currencies, including the THB. Not too hard to understand. In fact, the FED erred in raising rates at all in Dec. because there has not been even the ghost of inflation in the US, as, indeed, in the world for a long time and no immediate prospect of inflation. So, no problem to solve for which reducing credit (and therfore jobs) is the answer.

I am always amazed that so many of those who lack even the most basic clue about economics, which includes nearly everyone posting in this thread, find reasonable the most dire expectations of looming catastrophe in the US particularly. The thinking seems to be: if I don't understand it, it must be about to explode rather than, say, if I don't understand it, maybe I should just keep my own counsel.

[F4UCorsair]

There's a joke, but not sure it is really a joke.....

If you lined up all the economists in the world, head to toe, they wouldn't reach a conclusion.

I've spoken with economists about stock markets, world economic outlook, etc., and the usual response is, "Don't ask me, I'm an economist."

They can give you a theoretical position/analysis but not much more.

If that's the best economists can do, why bother asking on a forum where the best you'll get is uninformed speculation?

And if they ever did reach a consensus, better ask for a second opinion.

Sure...........from Thai Visa members??!!

[Nasrullah]

There's a joke, but not sure it is really a joke.....

If you lined up all the economists in the world, head to toe, they wouldn't reach a conclusion.

I've spoken with economists about stock markets, world economic outlook, etc., and the usual response is, "Don't ask me, I'm an economist."

They can give you a theoretical position/analysis but not much more.

If that's the best economists can do, why bother asking on a forum where the best you'll get is uninformed speculation?

And if they ever did reach a consensus, better ask for a second opinion.

Sure...........from Thai Visa members??!!

can i pay by the hour for 'economic lessons' from you!

You don't agree the US is broke and in danger medium-term to lose reserve status?

The 19 trillion dollar debt doesn't exist?.....Clowns running the show who have no idea how to get out of this mess?

Which coincidentally,they manufactured?

[midas]

In Q4 of 2015 the US economy grew 1.4%, which is relatively good compared to Europe and Japan and considering the lasting effects of the 2008 crisis. So, the FED raised short-term interest rates in December for the first time in nearly 10 years. So, foreign investors began accumulating dollars in anticipation of further economic progress that would be followed by higher interest rates. Contrary to those expectations the US economic growth slowed in Q1 2016 to 0.4%. So, the FED decided not to increase short-term rates for the time being out of fear of slowing growth even further. The currency market has absorbed that information, marking the dollar down against many other currencies, including the THB. Not too hard to understand. In fact, the FED erred in raising rates at all in Dec. because there has not been even the ghost of inflation in the US, as, indeed, in the world for a long time and no immediate prospect of inflation. So, no problem to solve for which reducing credit (and therfore jobs) is the answer.

I am always amazed that so many of those who lack even the most basic clue about economics, which includes nearly everyone posting in this thread, find reasonable the most dire expectations of looming catastrophe in the US particularly. The thinking seems to be: if I don't understand it, it must be about to explode rather than, say, if I don't understand it, maybe I should just keep my own counsel.

" I am always amazed that so many of those who lack even the most basic clue about economics, which includes nearly everyone posting in this thread, "

Funny that this seems to be a recurring claim in many of your posts. are you just brilliant compared to everyone else ?

[theguyfromanotherforum]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

You mean the country with the largest GDP? Great quality of life for people who live there? Ample opportunity to advance yourself? Etc? Comparing the Thai economy to the US is a bit ridiculous. Plus, who knows how the Thai economy is doing. They've admitted to lying about this in the past.

Naam! Where are you? LOL

IMHO, a lot has to do with the stock market and where interest rates are going. The current Fed meeting held rates steady. When they boost them, the USD will probably get stronger. All that hot money will flow back to the US. IMHO. As long as the US economy is still strong....

Worth a read:

http://www.investopedia.com/articles/forex/09/factors-drive-american-dollar.asp

http://video.cnbc.com/gallery/?video=3000514153

oops

[marcusd]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

Everybody works here?

I see many work in snooker halls.

AHA so you have just started looking? And so many work FREELANCE in bars too helping - yes helping you with drinks and massage too

[marcusd]

Some of us have been warning about the inevitable decline of the US dollar for some time now...

The US unpayable debt...creating money out of thin air and flooding the market place with dollars when the US economy has been in recession for years...has damaged US Fed and Central Banking credibility...other countries are dumping dollars...other countries are tired of US BS and are beginning to trade for oil in other currencies...other countries do not want to buy US Bonds to help support the US government because of the US leadership's inability to control spending...

The best stores of wealth on the planet are land (location is very important) and Precious Metals (Gold and Silver)

Good Luck!

There are 2 various economic positions. One is PRINT more money as we no longer PEG to gold as there just isn't enough gold... and the other stance is to balance and all that we have now.

The Opposing view is JUST print and flood the market with money.

The world trades in US dollars. Simple. fact like it or not. I don't like it as I am Australian and it costs me 30% more to buy!

So who make US $$$? Simple isn't it? And if you have 1us$ you still get that honoured. So if the US printed 20 trillion and rates moved a bit or didn't move as we really would not know, would China refuse the US$ or germany or japan or Thailand for that matter? No they would not as that is the Hedge currency. the world standard.

And only one place can print that currency and it is not located in Khao San Road.

And as much as we might posture there are bigger things happening behind closed doors we will never be privy to.

And the world populaces - you and me - get no say despite what great knowledge we hold. All we have to do is ask why so many people around the world are turning against CONVENTIONAL politics and going for Trump, and Look at France and Germany and Philippines? And sadly no political powers in control now understand or can see this. Obviously they don't read the news or Thai Visa.

Its all changing. People are bored with status quo because you and me on the street think we don't have enough. I would like someone to actually define WHAT IS ENOUGH?

[marcusd]

Obarma is a goose. And all his hidden errors are unfolding and Trump is left to pickup the cheap foundations and lay solid bricks

Trump is too much of a liability for the world. IF he gets the nomination..he will be removed.. Somehow..

I am not so certain. People dismiss this man as a reality TV super star. Really? I wonder why? He is a self made for the most part BILLIONAIRE and last time I looked money doesn't fall from the sky. Nor is there some van driving around throwing money off.

He may be saying things to get votes but who doesn't? And he is keen for business and maybe he may just revive things. I remember when China as a basket case and an "emerging" economy. Now people think China is the be all and end all. And that can change in an instant. Tariffs, trade war and taxes. And who would emerge the winner?

I think the western nations. Who CREATES and who Copies and steals? The followers must always have a leader.

think hard about this one.

[ttthailand]

So if the dollar is heading south what is the best currency to be holding now ?

[marcusd]

The USD will continue to weaken as the US economy keeps degrading. When zero percent interest rate is all the FED can afford while the economy is supposedly "booming", anyone can conclude that they are feeding people a load of BS statistics.

The USD is not backed by any tangible value, just by how its perceived and needed in terms of the worlds reserve currency. This position is degrading at an accelerating speed with federal QE programs and other government intervention which until recently has created an illusion of strength. Sell USD and buy commodity, silver or gold bullion.

a weakened dollar usually means more competitive trade.

So the US goods are expensive for other countries to buy. What would YOU rather buy? Made in China or made in US?

People cannot afford the US goods they say, so they buy China made, and all have Iphones and shit they really do not need. Oversupply is probably an issue. Downgrading US economy may be good for the BIGGER picture of what I see in the US as a total outsider who views this only to see how my own business will fare.

If Hillary wins, we get war in Mid east as she will support Israel to bomb Iran as she really was against the deal looking back at her history.

Trump we get a trade war - Hillary too to an extent - as both want to reign in the China powers using money to do that.

So weakened US dollars means more attractive to but US goods and services.

History repeating itself here to some degrees. Russia crippled by oil prices - money wins. We all love it.

[marcusd]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

Naam whilst I respect your many views I dearly disagree about the GDP in China. Much of this is manipulated. Factories send their workers after 4 years ON HOLIDAY the factories pay for and this is why so many undeducated Chinese traveling. I know this because I deal with factories in Guandong area - Shenzen. China has a lot of FALSE growth. Get on one of those fast trains from Shanghai and go anywhere and all you see are towers of units and apartments with no one in them EMPTY spaces.

China needs the west as it is western companies there making China strong. they copy steral and then just make. This is so easily stopped if people want to. But there are consequences.

It is a simple law of physics.

For every action there is an equal an opposite reaction. That is what is happening in our world today and even if I wanted to rely on spooks and prophecies, this has all been stated before. The world order WILL change and right now looking around we are seeing that with Putin, China Thailand Trump and the EU

In summary, Chines economy is artificially massaged, People in world markets love it as it is an excuse for the gamblers at the stock exchanges and news outlets to make money

[marcusd]

34-35 Now, couple of years ago it was 28-29... That's life,

Up down.....

You have summed up life in Thailand after these blokes get their pensions and head for the bars!

[marcusd]

So if the dollar is heading south what is the best currency to be holding now ?

If you get a big map of the world you can look at what is in the south and get there first!

[gudtymchuk]

Maybe the dollar is going down due to the backlash of Barack Obama trying to influence the outcome of Brexit, and clearly failing! Also the prospect perhaps of Donald Trump actually making it to the nomination!!

Really nothing to to do with Brexit, even if it happens!

Yep, In "Merica... B. Hussein Obama is the only one obsessing over the question of will the Brits vote to stay or to leave.... ? As with anything in Thailand, what the BOT does with the baht, even they don't have a clue.

[hugh2121]

In Q4 of 2015 the US economy grew 1.4%, which is relatively good compared to Europe and Japan and considering the lasting effects of the 2008 crisis. So, the FED raised short-term interest rates in December for the first time in nearly 10 years. So, foreign investors began accumulating dollars in anticipation of further economic progress that would be followed by higher interest rates. Contrary to those expectations the US economic growth slowed in Q1 2016 to 0.4%. So, the FED decided not to increase short-term rates for the time being out of fear of slowing growth even further. The currency market has absorbed that information, marking the dollar down against many other currencies, including the THB. Not too hard to understand. In fact, the FED erred in raising rates at all in Dec. because there has not been even the ghost of inflation in the US, as, indeed, in the world for a long time and no immediate prospect of inflation. So, no problem to solve for which reducing credit (and therfore jobs) is the answer.

I am always amazed that so many of those who lack even the most basic clue about economics, which includes nearly everyone posting in this thread, find reasonable the most dire expectations of looming catastrophe in the US particularly. The thinking seems to be: if I don't understand it, it must be about to explode rather than, say, if I don't understand it, maybe I should just keep my own counsel.

Total income = 20 shillings

Total outgoings = 19 shillings and 6 pence

Result = Happiness

Total income = 20 shillings

Total outgoings = 20 shillings and 6 pence

Result = Misery

Charles Dickens ( I think Mr Micawber ) Many years ago.

[MyFrenU]

The US Dollar was the best performing currency of 2015,unfortunately the Federal Reserve Bank made a rod for its own back and to save losing face had to raise interest rates by 25 basis points,or 0.25% to retain any credibility inernationally.It was of course the wrong decisions they also predicted another 3-4 rate rises during 2016 and have now ended up with egg on their collective faces.
The may raise rates once more in June,September is a big no-no because of the Presidential elections and this is why the US Dollar is weakening against all the other major hard currencies right now,as well as the figures coming out of the US for manufacturing,consumer spending etc. are at best mixed,at worst going downhill fast!
Expect to see the US Dollar come back if they do raise rates even once in June but failing that it will probably capitulate pretty spectacularly against the majors,which will be accelerated should the figures coming out of the US continue to worsen.Personally I don't think it will be good news for the US Dollar this year at all and fully expect to see the EURUSD hit $1.20-$1.25 by the end of the year,possibly even $1.30!

[MyFrenU]

Don't you know about what event is on the horizon?

try a search on YouTube for "usd 28 may"

To paraphrase Mark Twain "Reports of the US Dollar's demise have been greatly exaggerated",what utter nonsense!

[Asiantravel]

The world’s central banks own more than 50% of the publicly traded US debt of $13.5 trillion, and not one single penny of it was purchased with real savings or anything which remotely resembles honest money. It was all scooped-up when central banks hit the “buy” key on their digital printing presses.

In short, the “very low yield” on US Treasury debt is the product of a giant monetary fraud, not a testament to the strength and safety of Washington’s credit. And it most certainly has nothing whatsoever to do with investor “confidence” in Washington’s integrity.

Trump’s Right——Paying Back The National Debt With “Discounts” Is Already Official Policy

http://davidstockmanscontracorner.com/trumps-right-paying-back-the-national-debt-with-discounts-is-already-public-policy/

[Berkshire]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

Cmon Naam, are you suggesting that the economies of Saudi Arabia and Russia are not in the toilet? As for China, do you know about the corruption, pollution, inflation, inequality, social unrest, etc.?

As for the recession in the EU comment, that wasn't the Fed talking but some financial dude on CNBC. Wasn't even my opinion.

i said "does not necessarily mean...".

but yes, Russia is in a recession, no doubt about that.

Saudi Arabia's economy is not down. because, as per definition, an economy never existed. hopefully the new young chap in charge has success. but it will take a couple of decades to develop an economy and a strong hand to teach the young Bedouine generations what work means and that the hand-outs are limited.

as far as China is concerned your litany of negative points does not negate the fact that the economy is still growing at a pace many "shining beacons" can only dream of.

all afore-said of course in my [not so] humble opinion

Just thought you might be interested in this article discussing Saudi Arabia's "looming financial disaster."

http://money.cnn.com/2016/05/09/investing/betting-against-saudi-arabia-cheap-oil/index.html

It also discusses briefly the "explosion of debt in China that is unsustainable..."

[craigt3365]

Just thought you might be interested in this article discussing Saudi Arabia's "looming financial disaster."

http://money.cnn.com/2016/05/09/investing/betting-against-saudi-arabia-cheap-oil/index.html

It also discusses briefly the "explosion of debt in China that is unsustainable..."

The problem is Saudi Arabia needs oil prices at over $100 a barrel to break even on its budget.

I think another member said I didn't under the oil industry when I mentioned the above. They are just spending too much. And cuts aren't easy.

[MyFrenU]

"Just thought you might be interested in this article discussing Saudi Arabia's "looming financial disaster."

http://money.cnn.com...-oil/index.html

It also discusses briefly the "explosion of debt in China that is unsustainable...""

You forgot GENOCIDE,CIVIL WAR AND A ZOMBIE APOCALYPSE upon Brexit...

[Naam]

Just thought you might be interested in this article discussing Saudi Arabia's "looming financial disaster."

http://money.cnn.com/2016/05/09/investing/betting-against-saudi-arabia-cheap-oil/index.html

It also discusses briefly the "explosion of debt in China that is unsustainable..."

i hope you are not terribly disappointed if i decline to read the -not only biased but utmost ignorant- novels spun by journalists who were given an agenda by their media bosses.

only a few days ago i took (forced by the Mrs.) a look at an article pertaining to the country and specifically to the deputy crown prince Mohamed bin-Salman.

as we have spent years living in Saudi Arabia and visit the country once a year i felt like and the Mrs. was

[Berkshire]

USD sure is heading north these days...

[Pib]

USD sure is heading north these days...

It's been north below....then came back south...then went north again...then came back south...etc...etc...etc.

[Berkshire]

USD sure is heading north these days...

It's been north below....then came back south...then went north again...then came back south...etc...etc...etc.

That's actually my point, that currency exchange rates do tend to fluctuate. Which is why this thread--and many like it--is rather pointless.

[IMA_FARANG]

In the last two weeks the U.S. dollar has gone back up against the Baht.

As i said once before in another post.....I am a retiree with a U.S. dollar pension paid monthly....so I do keep track of the Baht dollar excange rate.

Rate was down below 35 to a dollar in beginning of May....but back above 35 last week (15 May)

Main reason was speculation that the Fed may raise base rate in June or July and worries to the Pound about the resultsthe of Britexit referendum.

Personally i see it as only random flucuations as the so-called Experts are nothing more than guessing.

Doen't bother me though if I get a few thousand Baht in my Thai bank account each month.
As for Donald Trump....i regard him as a fat old fool....along with most of his supporters.

Just my opinion.