Top 4 things to watch out for dollar's sake
What is the main benchmark of trading these days? Well, of course the US dollar! Everything is priced and measured against the dollar. And while the collapse and weaknesses of the American currency is a possibility to get some light and fresh air for other currencies for us as traders it is usually a horrible occasion.
That brings me to my point: we need to know the forecast for the American currency in order to understand what to expect in the nearest future.
So, will dollar bring us some joy with stability?
1. 2018 was a strong year.
It is possible that the greenback will be able to extend some of the strength gained in 2018 into the future. Although it is hard to say at the moment, in a couple of month it’ll become obvious – last year was a strong one for the greenback. And as a result other currencies were a little bit suffocated underneath it.
Of course euro and pound were also taken by their own problems, but that doesn’t mean that they can’t simply get stronger this year. After all a lot is scheduled for the next three months. Dollar dropped a lot because of the trade war imposed by Trump and next week is supposed to mark the beginning of talks on the question. The greenback is bound to react to that as traders are pretty focused on the talks at the moment.
Everything is possible. Just like the greenback riding that success wave.
2. Difference of opinion.
Although the extension of growth is possible a lot of people are saying that bears are going to take ahold of the greenback and of the market as a whole next year. What does that mean? That the economic growth that is standing behind the dollar’s strength can easily slow down. We have already witnessed what the bears can do to the markets in just one day. It is scary to think what can happen in several weeks of a stay like that.
And it is that difference in opinion and that difference in information that is usually gets us in doubt while trading.
3. Wild card.
There is always someone or something that we can’t possibly predict the behavior of. And in this case it is Donald Trump. We are currently looking at the longest governmental shutdown in the history of the United States. All because no one could foresee that he is going to try and go through with the wall on the Mexican border. We suspected, but to believe in it was really difficult.
And that kind of behavior of American president is not something that is going to attract people towards dollar.
What does that mean for us? The fact that the greenback can lose some support along the way and get even weaker. With Trump in White House it is easy to imagine a situation like that as no one is going to want to invest into something that unstable. That is just good sense.
4. When are we to expect the falls?
It seems that even if we are going to look for the reasons for the fall of the greenback we are going to see it only in the second half of the year. Right now it may be the time for us to enjoy greenback. If it lets us. We have already seen some uncertain moves from its side and the stand-still is easily changed by the
In case you are looking for reasons to stay or pull out of dollar trading altogether it is all up to you. Ater all it is quite subjective.