collected by :Irax John
referring to Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, January 21, 2016.
.DXY”We have a holding pattern ahead of the healthcare vote tonight,” said Richard Cochinos, European head of G10 currency strategy at Citi in London.
After losing 3.5 percent in the past 10 days, the dollar was roughly steady at 111.05 yen.
It puts everything in question and we may well see the dollar below 110 yen.”
That faith has evaporated steadily since the turn of the year and the dollar has fallen against all of its major peers in response.
Risk of a U.S. Dollar Devaluation in 2017 Very High
as declared in Risk of a U.S. Dollar Devaluation in 2017 Very HighEffect of Trump’s Tax Plan on the U.S. DollarWould a U.S. dollar devaluation in 2017 really be good for the U.S. economy?
(Source: “Donald Trump Warns on House Republican Tax Plan,” The Wall Street Journal, January 16, 2017.)
And he believes one of the best ways to get there is with a devalued dollar.
As a result of the retreat in the U.S. dollar, one currency and fixed-income analysis predicted the U.S. dollar would end Donald Trump’s presidency significantly lower.
The U.S. dollar started the year strong but faded after Donald Trump said the U.S. dollar was “too strong” relative to the Japanese yen and China’s yuan.
Busting A Myth: U.S. Dollar Impact On WTI
The assumption therefore is that higher rates equate with a higher dollar and that translates into lower crude oil prices.
How many times have you seen this: “Because the U.S. dollar is the quoted currency in oil, a stronger dollar buys more oil per dollar and causes the price of oil in dollar terms to fall.
Currently, the U.S. produces just over 9.1 million barrels per day (b/pd) of crude oil, the majority of it WTI or equivalent.
Conversely, a weaker dollar buys less oil, so when the dollar depreciates, the global price of oil rises.
In other words, neither factor is very useful in accurately forecasting the direction of the price of WTI.