U.S. dollar on the verge of breaking long-term support?
The U.S. dollar has been drifting lower year-to-date, falling rather abruptly after the worse than expected job report last week.
It may be a good time to add to gold/silver, or other commodity related, investments. Commodity currencies such as the Australian Dollar and Russian Ruble have performed quite well this week. I expect this strength will continue if the U.S. dollar continues to weaken from here.
Happy trading ; )
If You figure in the fundametal forces occurring in the world, Russia-China pushing for war, the DJIA teetering on the edge of sliding WAY down, BRICS Bank, then one can see how this is inevitable. What do You think?
I think international conflict and market panic might actually be bullish for the U.S. dollar in the short run.
I do agree long-term there are too many forces working against it though. The amount of dollars that were printed over the last several decades is sizable to say the least. However, most of these dollars are held abroad and in foreign reserves. This is a big reason we haven't seen the level of inflation (or decrease in dollar value) you'd expect with all the money printing and debt issuance the Fed has pursued. International trade will probably rely less on the dollar going forward and inflation will ultimately come home to roost.
While I do expect a decline, I don't expect a collapse, at least relative to other fiat currency, because there is no currency with enough trust to replace it.
The FED is afraid to raise rates. They'll probably join the others and go negative. Good for gold, bad for the dollar.