U.S. Dollar IndexShort
USD has the potential to fall 10% over the next three months
Updated
There is too much pressure world wide to cope with the trade wars. It's going to be a race to the bottom. Central bankers world wide are now of the view that the only way to support ailing economies is to reduce interest rates and avoid the additional burden they bring on indebted companies.
After the US currencies rapid rise as an alternative to weaker global currencies the cycle is about to change as US continues to see low economic readings and political pressure mounts. The low inflation numbers in the US mean that for now the risk of higher inflation brought on by a weak dollar is an acceptable risk to protect businesses and avoid tantrums in the White House. US 10 year yields are going through the floor. Investors have already started pulling funds out of the USD.
After the US currencies rapid rise as an alternative to weaker global currencies the cycle is about to change as US continues to see low economic readings and political pressure mounts. The low inflation numbers in the US mean that for now the risk of higher inflation brought on by a weak dollar is an acceptable risk to protect businesses and avoid tantrums in the White House. US 10 year yields are going through the floor. Investors have already started pulling funds out of the USD.
Note
The G7 have this weekend supported China in their dispute with the White House which accused China of being a currency manipulator. The IMF have tacitly supported China also. This unusual situation has been brought about by donald trump's weaponization of trade tariffs and has only served to isolate the USA in the commercial world.
China is no free to allow the market to dictate the slide of the Yuan and make Chinese imports into the USA competitive regardless of trump's attitude.
USA has only two options: 1) Negotiate a compromise with China, or 2) reduce it's own interest rates to devalue the USD thereby making Chinese import more expensive and making it's own export cheaper.
the dollar will continue the slide regardless.
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