The future of the U.S Dollar

Hi guys, can someone please explain in plain how does the CPI reports affect the dollar, I thought the such numbers would be bad for it but surprisingly it is strong esp against Gold but I read somewhere that it is because of bond yields.
Long story short, Should I continue looking for opportunities to short the dollar?.

Thanks,

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Yes, but the problem is that all the world’s countries, and therefore currencies, are printing it like it is going out of fashion. I have assigned a small amount of our assets to short the dollar, by going long Crypto-currencies. Other than that, you need to think whether you wish to trade currencies, or invest in currencies. Trading implies short term involvement (minutes to weeks) whereas investing implies long term (months to years). The latter depends a lot on fundamentals - like strong or weak currencies. The former depends a lot more on technical analysis of short term fluctuations.

Acutually, CPI is a broad measure of inflation within an economy in relation to the cost of goods and services. Hence that figure can have a significant impact on the value of a currency in relation to the currencies of other nations. Speaking about dollar, in the US, the Labor Department releases the CPI and Core CPI figures, which don’t include the costs of energy or food in the measure. Should that number beat market expectations, the dollar typically sees a boost against other currencies. However, should these readings fall short of consensus expectations, the currency will fall relative to other paitings.

It’s very difficult to predict what will happend with dollar in couple of years or decades, you know. I’m personally convinced that nothing serious will happen with it because it’s one of the most strongest currencies in the whole world. Yeah it dropped a little bit after the corona began and today we see that there is an insignificant inflation in the US hence dollar dropped, however, I tend to suppose that it’s a so called challenge on endurance for US economy, guess that it will never fall or weaken. What I know for sure is that the restoration of the currency stability takes about a year or something like that.

in the world it has always been and will be, the market is always tied around the dollar, whoever says what

It’s kinda difficult to predict the future movement of a price of US dollar, because everything depends not on economical events ast it was in the past, but also, the policy which is conducted by the contemporary government harms US dollar a lot. We can see that today it’s becoming weaker and weaker, because of mild policy of present president. Of course, there are maybe some other reasons of weakness of a dollar, however, they all are tighlty connected with political sphere. I believe that everything depends on what steps the president will make in order to strengthen the economy of the United States.

That depends on timeframe and comparison with what - another currency, or gold, price of oil or what else?. It is my understanding there used to be about $4 for one Sterling Pound. But that was before my time. In my working life, one GBP has been as weak as $1.05 (strong dollar) and as strong as $2.40 (weak dollar). I wouldn’t describe the current rate of around $1.37 as particularly weak. Trying to interpret the news, on the one hand, events in China are leading people to think of the USD as strengthening (but not all folks see it that way). On the other hand, some say that the US economy is “booming” so they would expect a strong USD.

If I were to have to put money on it, I would say the dollar would strengthen for the rest of this year. Beyond that, I would need to get out my other crystal ball that sees farther than 3 months into the future :rofl:

Depends on expectations regarding the outcome. If the number was too unexpected then you may see desired reaction of USD. Expectations are in turn tied how the outcome of the report can affect Fed decision.

To my mind it’s very difficult to predict what will be with the currency in couple of years or decades, mainly because the price of a currency depends on the economic agenda which is conducted by the government. If the US once will decide to close its borders from the China and Russia, then it won’t be very cool for a dollar actually. As we can see, the US is famous for its protectionism policy, especially when Trump was the president, he began the trade war with China and it reflected on dollar and on all the currency pairs which consist of dollar. The present president isn’t so categorical, nevertheless, we should rely on the Obama’s policy, as Biden is the same kind of president.

The US dollar will be stronger and stronger and this fact is hard to argue actually. Of course, some people believe that the US dollar will soon face the devastation, nevertheless I can’t allege such categorically. The US dollar is considered to be one of the most strongest currencies in the world, moreover, it’s proved to be one of the strongest. That’s why it’s kinda difficult to tell about the crash of the US dollar. It’s even impossible to imagine the crash of the dollar. We can imagine the crash of other currency, but not the US dollar.