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  • Dollar Plunges Most in 7 Years on Rate Bets as U.S. Stocks Drop

    From bloomberg.com

    The dollar sank the most in seven years against major currencies, while U.S. stocks retreated as services data raised concern about the strength of the American economy and the bear market in financial shares deepened. Crude rallied past $31 a barrel in New York. The Bloomberg Dollar Spot Index tumbled 1.9 percent after data showed services industries expanded at the slowest pace in nearly two years. The Standard & Poor’s 500 Index headed for its first three-day slide in four weeks as bank shares plunged 2 percent. Crude rallied more than 6 percent after its biggest two-day plunge in seven years, and ... (full story)

What a false conviction, stocks are where they were yestarday, while USD not. In future, stock crash may somehow help in EUR, JPY strenght.

However, EUR was preparing for this move almost 2 months. It is something more then simple rate bets. I expect much more to come.
Pls more FED intervention
Dollar will be much higher because a few things:

Whether you like it or not, it's the reserve currency. There is really no conviction in the risk selloff, but when there is capitulation those assets will be sold for dollars

Global central banking easing inherently pushes the dollar higher, even on a broader trade weighted basis. Essentially, the US is importing huge amounts of deflation.

US recession likely this year, and deflationary pressures mounting.

Keep in mind, the dollar declined into the 2007 recession before spiking higher.

Essentially, the only thing that can undue the dollar is the fed.
When the facts change I change my mind, what do you do sir
Quoting Pip Anon
Dollar will be much higher because a few things:

Whether you like it or not, it's the reserve currency. There is really no conviction in the risk selloff, but when there is capitulation those assets will be sold for dollars

Global central banking easing inherently pushes the dollar higher, even on a broader trade weighted basis. Essentially, the US is importing huge amounts of deflation.

US recession likely this year, and deflationary pressures mounting.

Keep in mind, the dollar declined into the 2007 recession before spiking higher.

Essentially,...
Hahahhahahahahahahaha
Quoting Pip Anon
Dollar will be much higher because a few things:

Whether you like it or not, it's the reserve currency. There is really no conviction in the risk selloff, but when there is capitulation those assets will be sold for dollars

Global central banking easing inherently pushes the dollar higher, even on a broader trade weighted basis. Essentially, the US is importing huge amounts of deflation.

US recession likely this year, and deflationary pressures mounting.

Keep in mind, the dollar declined into the 2007 recession before spiking higher.

Essentially,...

... what are you talking about???????????????????

... there is no real reserve currency since 1970 when all the gold reserves couldn't cover the debt at that time. Since then the FED (a private banking cartel) has just added more and more printed money out of thin air and giving loans against real assets as collateral ...
Quoting Pip Anon
Dollar will be much higher because a few things:

Whether you like it or not, it's the reserve currency. There is really no conviction in the risk selloff, but when there is capitulation those assets will be sold for dollars

Global central banking easing inherently pushes the dollar higher, even on a broader trade weighted basis. Essentially, the US is importing huge amounts of deflation.

US recession likely this year, and deflationary pressures mounting.

Keep in mind, the dollar declined into the 2007 recession before spiking higher.

Essentially,...

1. There is a lot of carry trade in US stocks

2. Not many tools left for CBs

3. Possible reversal of US rate hike path

4. Bubble on USD got to burst sooner or later


Before USD gets stronger, carry trade needs to be cleared, rate hike path reversal discounted and other CBs need to stimulate more. Then typical correlation of stronger USD during crisis would occur.... I believe this will happen, if the world's economy crashes.
Quoting JakubSzalaFX
1. There is a lot of carry trade in US stocks

2. Not many tools left for CBs

3. Possible reversal of US rate hike path

4. Bubble on USD got to burst sooner or later


Before USD gets stronger, carry trade needs to be cleared, rate hike path reversal discounted and other CBs need to stimulate more. Then typical correlation of stronger USD during crisis would occur.... I believe this will happen, if the world's economy crashes.
Yes, the carry trade. But this majority is invested in the European markets. Therefore, the withdrawal of capital from the dollar is strengthening.
The weakening of the dollar today, a typical FED intervention.
Quoting Sanguis
Yes, the carry trade. But this majority is invested in the European markets. Therefore, the withdrawal of capital from the dollar is strengthening.
Carry trade, that is capital outflows from low interest rate currencies (EUR, JPY) to high interest rate (USD). US stocks bull trend is loaded with JPY, less with EUR.



PS

Intervention in modern markets, especially in these very liquid like USD is useless. It is old fashioned tool.
Quoting JakubSzalaFX
Carry trade, that is capital outflows from low interest rate currencies (EUR, JPY) to high interest rate (USD). US stocks bull trend is loaded with JPY, less with EUR.



PS

Intervention in modern markets, especially in these very liquid like USD is useless. It is old fashioned tool.
Eastern and southern European government bonds, dollar hot. and so on. What are you talking about? The yen's other game.
Look at all you dollar monkeys, don't worry dollar will bounce 1% tomorrow and gold will crash 1%

go sleep you degenerate retail trading gambling monkeys
Quoting Daehoth
Hahahhahahahahahahaha
It's pretty simple.
When the facts change I change my mind, what do you do sir
Quoting Sanguis
Eastern and southern European government bonds, dollar hot. and so on. What are you talking about? The yen's other game.
Capital outflows from EM have been taking place since the FED gave clear hint of taper. So it is nothing new and shocking.

BTW.

Which southern and eastern eu countries?
  •  Guest
  • | IP XX.XXX.164.103
Euro jumping, an ascending wedge, but I think QE will prevail, and draghi will talk that euro so hard down. Migration/Low Inflation/CUP, all things to think about.
  •  Guest
  • | IP XXX.XXX.78.155
that is precisely why forex is so hard to predict, a simple comment= thousands of reactions.
Guys,

I am trading EUR/USD.
Will someone please share his view about when USD may get strong against EUR again.

Thanks.
The dollar cant be the reserve dollar.... The crash will inevitable...great depression...
  •  Guest
  • | IP XX.XXX.216.148
Quoting Guest
that is precisely why forex is so hard to predict, a simple comment= thousands of reactions.
And you or anyone knows for a fact that a singular comment explains moves that have building up for weeks? I cannot stop laughing at the total lack of sense to that kind of thinking. The market is hard to predict for you because you apply and or depend the wrong kind of approaches to it. You cannot rely on linear reads in a mathematically chaotic system. Since folks will not make the effort to understand the chaology of markets I guess we shall have to put up with this type of childish view you just expressed and accept traders to be gamblers on average and keep wondering why they do not simply migrate to slot machines full time.

The Crow (-_-)
Quoting Michealliew
The dollar cant be the reserve dollar.... The crash will inevitable...great depression...
It's been an inevitable crash for how long? You have to trade the what is not the what you want it to be.
When the facts change I change my mind, what do you do sir
Quoting Guest
And you or anyone knows for a fact that a singular comment explains moves that have building up for weeks? I cannot stop laughing at the total lack of sense to that kind of thinking. The market is hard to predict for you because you apply and or depend the wrong kind of approaches to it. You cannot rely on linear reads in a mathematically chaotic system. Since folks will not make the effort to understand the chaology of markets I guess we shall have to put up with this type of childish view you just expressed and accept traders to be gamblers on...
10/10
Quoting Pip Anon
It's been an inevitable crash for how long? You have to trade the what is not the what you want it to be.
hahahahahhahahahahaha
Quoting Pip Anon
It's been an inevitable crash for how long? You have to trade the what is not the what you want it to be.
It sounds wise for those who want to trade successfully !
  • Comment #23
  • Quote
  • Edited Feb 5, 2016 12:30am Feb 4, 2016 7:25am | Edited Feb 5, 2016 12:30am
Quoting Pip Anon
Dollar will be much higher because a few things:

Whether you like it or not, it's the reserve currency. There is really no conviction in the risk selloff, but when there is capitulation those assets will be sold for dollars

Global central banking easing inherently pushes the dollar higher, even on a broader trade weighted basis. Essentially, the US is importing huge amounts of deflation.

US recession likely this year, and deflationary pressures mounting.

Keep in mind, the dollar declined into the 2007 recession before spiking higher.

Essentially,...
I agree with your summary of the major vectors acting on the USD and you say the critical word: deflation.

As you say, the dollar can only be undone by the Fed, and the Fed (whether the outcome shows them to be clever or foolish) were the first to tighten amidst global central bank easing. PBoC must ease, but the Fed is tightening. I often think about this fact and wonder if the Fed is playing a long game. If it is, the primary weapon seems to be a strong dollar. Via its "overnight reverse repurchase agreement" the Fed pays the largest lenders, the shadow banks GS, JPM, etc *not* to lend to commercial banks.

So, the Fed is tightening which will strengthen the USD.

Global CB easing strengthens the USD, particularly devaluation of major DXY components the euro and yen.

Debt defaults, anywhere in the world, will tend to lead back to US banks and ultimately the Fed, so credit deflation will strengthen the USD.

As the currency of the world's only super-power, the USD holds psychological hegemony which is illustrated like this: in the street markets of Africa and SE Asia, low income vendors will refuse Yuan, but will gladly, and with discount, accept USD. The dollar is the king of cash. If "poor", cash-based, business people reveal this psychology, how much more, then, does this hold true among the urbanized and global middle-class masses?

Some argue that the Fed will reverse their rates hike policy and go NIRP. This is arguable and speculative, but is unlikely to reverse the dollar's path of strengthening - credit deflation, which has been the elephant in the room for 4 decades, is surely the stronger influence on forex dollar value.

With the bulk of the planet's debt denominated in USD, and most of it held by entities in the US, it is easy to see what happens to the value of cash money when the credit money evaporates:

Money supply = physical cash + credit

Deflating the money supply, increases the value of each unit of money. Surprisingly, its as simple as that.

As you point out, the dollar also dipped going into the previous credit-based recession and then rose prior to having the bejeezus QE'd out of it. That easing was intended to prevent a global credit collapse. Will it work a second time? Possibly, but unlikely, is the prudent answer, because ultimately the Fed does not control the dollar or markets. So long-term, the dollar can only strengthen.
cryptocurrency everytime
Quoting venzen
I agree with your summary of the major vectors acting on the USD and you say the critical word: deflation.

As you say, the dollar can only be undone by the Fed, and the Fed (whether the outcome shows them to be clever or foolish) were the first to tighten amidst global central bank easing. PBoC must ease, but the Fed is tightening. I often think about this fact and wonder if the Fed is playing a long game. If it is, the primary weapon seems to be a strong dollar. Via its "overnight reverse repurchase agreement" the Fed pays the largest lenders,...

... haven't seen so much non-sense since long time ...
  •  Guest
  • | IP XX.XXX.128.153
7 year bullrun... what you guys thought it would just keep going up forever? This should be a surprise to no one, instead there should be talks of where/when it should stop correcting
I think the correction is ending soon, topped out stock market maybem before June and $ will fly
Come with me if you want to live....
Quoting golfking
... what are you talking about???????????????????

... there is no real reserve currency since 1970 when all the gold reserves couldn't cover the debt at that time. Since then the FED (a private banking cartel) has just added more and more printed money out of thin air and giving loans against real assets as collateral ...
Based on your two sentences quoted above, I could say the same to you, but let's rather speak specifically:

We agree the Fed prints money out of thin air. However, do we agree that they are not printing physical cash notes? What you refer to as "loans" is the money they conjure. The loans are credit and they count toward USD money supply.

The value of the USD is interconnected to a basket of currencies. So that is the forex aspect of its valuation, but it is also valued extrinsically according to supply and demand for cash dollars.

So, if the Fed is tightening by a) stopping USD inflation via QE, and b) reducing credit availability by increasing interest rates, then my argument is that they are deflating money supply. Doing that, regardless of forex dynamics, puts constant upward lift on the value of the dollar in general and the cash note dollar specifically.

What do you think?
cryptocurrency everytime
Quoting venzen
Based on your two sentences quoted above, I could say the same to you, but let's rather speak specifically:

We agree the Fed prints money out of thin air. However, do we agree that they are not printing physical cash notes? What you refer to as "loans" is the money they conjure. The loans are credit and they count toward USD money supply.

The value of the USD is interconnected to a basket of currencies. So that is the forex aspect of its valuation, but it is also valued extrinsically according to supply and demand for cash dollars.

So,...
First of all, I think that you are a smart person and that we represent 2 different views of the financial powers and their activities. There is the picture of a myth that the main media is hammering through TV-channels, newspapers, and social media websites, and the picture that is carefully hidden from the public.

Of course “they” are not sending full truck loads with printed Dollar notes, they just punch the numbers on the computer. So, “they” extend credit line to governments and banks against some valuable collateral which is the cheapest way to get valuable real estate, crude oil, other natural resources, industrial entities, and more if the debt cannot be covered according to their terms & conditions. Governments (compare US government) that can never pay back their debt need to accept more and more unfavorable conditions for the country.

See what happened with Greece? The billions of EURO given to Greece were not used to restructure the system or to pay back their debt because the funds were given to the financial mafia (partner banks) primarily to cover their own losses, and Greece government continues to struggle financially. But since then there are no more drama stories from the main media about Greece and the problems.

Who are “they”? The FED, Goldman Sachs, J.P. Morgan, IMF, Council on Foreign Relations, World Bank …. they dictate the global financial world.

Today, the FED, which is a privately owned company, controls and profits by “printing money” through the Treasury, and regulating its value. The FED began with approximately 300 people or banks that became owners (the stock is not publicly traded) in the Federal Reserve Banking System. The FED banking system collects billions of dollars in interest annually and distributes the profits to its shareholders.

Who actually owns the 12 Federal Reserve Central Banks?
1.Rothschild Bank of London
2.Warburg Bank of Hamburg
3.Rothschild Bank of Berlin
4.Lehman Brothers of New York
5.Lazard Brothers of Paris
6.Kuhn Loeb Bank of New York
7.Israel Moses Seif Banks of Italy
8.Goldman, Sachs of New York
9.Warburg Bank of Amsterdam
10.Chase Manhattan Bank of New York

How should U.S. economy ever improve with unlimited money printing, devaluating the USD, and manipulating artificially "stability and strength of the USD", with 40 years of negative trade balance, with fake job numbers, bad long-term manufacturing numbers, and more ... instead of improving productivity of resources …
How's everyone's USDJPY longs at 121?
When the facts change I change my mind, what do you do sir
Quoting golfking
First of all, I think that you are a smart person and that we represent 2 different views of the financial powers and their activities. There is the picture of a myth that the main media is hammering through TV-channels, newspapers, and social media websites, and the picture that is carefully hidden from the public.

Of course “they” are not sending full truck loads with printed Dollar notes, they just punch the numbers on the computer. So, “they” extend credit line to governments and banks against some valuable collateral which is the cheapest...

You're not understanding the dynamics. This happens with a lot of people.

Those that manage money focus on what it. Yes, the dollar is absolutely worthless. I totally agree.

However, it doesn't stop central banks holding it as reserves or 80% of international trade settled in... dollars.

We can all cultivate a zombie apocalypse scenario, which may happen , but it's not today...so far.
When the facts change I change my mind, what do you do sir
... yes, you know it all ... lol
Did they really tell you about their dynamics and how they stabilize the USD with the help of other major currencies?

... did you notice that the FED is pushing up the USD at the end of each month no matter how bad the news and US data are??? ... and you know why? .... because this is the most profitable product that they can sell globally.
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  • Posted: Feb 3, 2016 2:31pm
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 31  /  Views: 8,059