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Don’t be Fooled by the Pullback in the Dollar Because….
Don’t be fooled by the pullback in the U.S. dollar today because the greenback could still strengthen further before the end of the year. Nearly all of the major currencies rebounded because of local factors and not a shift in appetite for U.S. dollars or change in economic fundamentals. There’s been no data so far this week and stocks consolidated after yesterday’s slide. The strength of USD/JPY, which is hovering around 114 and near 1.5 year highs is a confirmation of the dollar’s dominance. To answer the question of whether the dollar will get stronger, we have revisit the 4 main reasons why its been rising this year.
4 main reasons why the dollar keeps getting stronger
1. Good Data
2. Rising Interest Rates
3. Equity Market Pressure
4. Trade Policy
Three out of four of these factors will still draw investors into the greenback.