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USD Collapse- What's More Important. Trade, Finance, or Trading Flows? 7/28/20


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Influences on USD include trade flows, including tourism, Financial flows, and pure trading flows. I've often wondered which is dominant.

Normally this time of year Americans are selling dollars and buying euros heavily because of travel. More Americans travel to EU than vice versa. Without that, you'd expect USD to be stronger than normal this year. But it's weaker. That leaves financial flows and trading flows. 

Obviously, there's a lot of buying of Treasuries. That would require foreigners to buy dollars. Again, it's not showing up in the USD price in other currencies. 

So by process of elimination,  this move is all about traders playing the charts. As losses mount for dollar paper holders, they're under pressure to sell the assets, i.e. Treasuries and US stocks, right?  So that should be bearish for those markets. 

What am I missing?

Dicsucs

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6 hours ago, DrStool said:

Influences on USD include trade flows, including tourism, Financial flows, and pure trading flows. I've often wondered which is dominant....................

 

 

what about oil....the petro-dollar is HUGE ....ever since the oil crash in April I have been musing about the effect the crash in petro-dollars would have on the dollar...over simplified to be sure..but it seems to me every country on earth has spent fewer of their dollars on oil which would, might, result in more dollars available in the system..supply and demand, more dollars available, dollar value drops.

I also wonder if  it would take time for those dollars to "pile up" in the system...thus the lag of just one month from oils crash in mid APRIL to the beginning of this down leg in the dollar which started in mid MAY... only one month...20 trading days

not saying it is the whole reason, but maybe a factor exacerbating the dollars weakness...

feedback required😉

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22 minutes ago, No Einstein said:

what about oil....the petro-dollar is HUGE ....ever since the oil crash in April I have been musing about the effect the crash in petro-dollars would have on the dollar...over simplified to be sure..but it seems to me every country on earth has spent fewer of their dollars on oil which would, might, result in more dollars available in the system..supply and demand, more dollars available, dollar value drops.

I also wonder if  it would take time for those dollars to "pile up" in the system...thus the lag of just one month from oils crash in mid APRIL to the beginning of this down leg in the dollar which started in mid MAY... only one month...20 trading days

not saying it is the whole reason, but maybe a factor exacerbating the dollars weakness...

feedback required😉

Good stuff! 

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