Comments on: Recent US Dollar Index Action Chart http://blog.afraidtotrade.com/recent-us-dollar-index-action-chart/ Helping traders overcome fears and emotions in trading Thu, 09 Feb 2012 12:53:25 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Nik http://blog.afraidtotrade.com/recent-us-dollar-index-action-chart/comment-page-1/#comment-133006 Nik Thu, 11 Sep 2008 09:20:12 +0000 http://blog.afraidtotrade.com/?p=2860#comment-133006 Stock prices are correlated with the company's profits and growth potential (in theory). Value of a currency is ALWAYS in relation to other currencies (that's why we ALWAYS have currency pairs. You can't really BUY dollar, without selling some other currency). Dollar hasn't gone up. It's the other currencies that are falling in relation to dollar. Dollar was oversold, for several reasons: 1) on purpose by the US government entities (weaker dollar = stronger exports); 2) on purpose by the Europeans (they wanted a strong currency); 3) of ignorance and denial by the Europeans mainly, who thought that oh this financial crises is mainly a US thing. It is a US thing, but when the US gets sick, guess what? Everyone crashes. And that means Euro is up for a little rude awakening. And that's exactly what is happening. Euro is crashing. USD has mostly been steady against the Chinese Yuan as of late. But CNY will go down (vs USD) also. Also NOT because the US economy is getting better, but because, guess what. China is gonna discover that it, too, depends on the US. Well, most people already know that, but getting a number out of China... That's another reason USD got sold. Because US is much more transparent than Europe and especially China. Others can hide their weakness for months hoping the storm is gonna go away. But this one ain't gonna go away so quickly. Alas, we are seeing the dollar appreciate even when the US market is down and full of bad news. Stock prices are correlated with the company’s profits and growth potential (in theory). Value of a currency is ALWAYS in relation to other currencies (that’s why we ALWAYS have currency pairs. You can’t really BUY dollar, without selling some other currency).

Dollar hasn’t gone up. It’s the other currencies that are falling in relation to dollar. Dollar was oversold, for several reasons: 1) on purpose by the US government entities (weaker dollar = stronger exports); 2) on purpose by the Europeans (they wanted a strong currency); 3) of ignorance and denial by the Europeans mainly, who thought that oh this financial crises is mainly a US thing.

It is a US thing, but when the US gets sick, guess what? Everyone crashes. And that means Euro is up for a little rude awakening. And that’s exactly what is happening. Euro is crashing.

USD has mostly been steady against the Chinese Yuan as of late. But CNY will go down (vs USD) also. Also NOT because the US economy is getting better, but because, guess what. China is gonna discover that it, too, depends on the US. Well, most people already know that, but getting a number out of China…

That’s another reason USD got sold. Because US is much more transparent than Europe and especially China. Others can hide their weakness for months hoping the storm is gonna go away. But this one ain’t gonna go away so quickly.

Alas, we are seeing the dollar appreciate even when the US market is down and full of bad news.

]]> By: theWild1 http://blog.afraidtotrade.com/recent-us-dollar-index-action-chart/comment-page-1/#comment-132031 theWild1 Sun, 31 Aug 2008 19:47:41 +0000 http://blog.afraidtotrade.com/?p=2860#comment-132031 Eyal - It will definitely be interesting to see what the new president and his people will do. Eyal – It will definitely be interesting to see what the new president and his people will do.

]]> By: Eyal http://blog.afraidtotrade.com/recent-us-dollar-index-action-chart/comment-page-1/#comment-131940 Eyal Sat, 30 Aug 2008 20:22:30 +0000 http://blog.afraidtotrade.com/?p=2860#comment-131940 This is the result of the dollar being so oversold and also maybe looking to the future where after election the new president will have to do something with the fact that the US in in a huge overdraft situation and the will have to make the dollar more attractive to foreign investors ( by raising rates or getting more taxes from the public ). This is the result of the dollar being so oversold and also maybe looking to the future where after election the new president will have to do something with the fact that the US in in a huge overdraft situation and the will have to make the dollar more attractive to foreign investors ( by raising rates or getting more taxes from the public ).

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