Forex Blog: Currency Trading News & Analysis.

February 17th 2006

Decline in USD may be inevitable

In recent months, prices of commodities and precious metals have begun to soar, a phenomenon that typically precedes a fall in the value of the USD. Many analysts have begun to speculate that a massive correction will soon beset the Dollar, as investors face the reality that the US twin deficits must be reined in before it is too late. Currency traders who remain bullish on the USD are now turning to technical analysis to justify their positions, rather than fundamental economic analysis. Based on current exchange rates, US consumers simply have no reason to slow their consumption of foreign imports, which remain relatively cheap. A depreciation in the USD will send consumers the signal they need and restore the current account balance to a sustainable level. The Asia Times reports:

Some believe higher interest rates may save the dollar as higher rates attract more investments. This analysis ignores the fact that as of the end of last year, the US pays more in interest to overseas creditors than it receives from overseas investment.

Read More: The psychology of a falling dollar

SocialTwist Tell-a-Friend
Posted by Adam Kritzer | in US Dollar | 1 Comment »

Sponsored Offers

FREE Daily Email Updates

Enter your email address:

Delivered by FeedBurner

One Review of “Decline in USD may be inevitable”

  1. Scorpion Says:

    Yes, agree. The USD is going to decline. It’s inevitable.

Have Questions? Want to Share Your Review?

Be heard. Please share your reviews today!

Neighboring Posts

© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.