Thanks for viewing,
Well the theory goes that the US is weak but the rest of the world is weaker, so the US market will continue on up which will support the currency. Maybe so, I am just looking at the chart.
What I do see, is an overvalued equity market and extremely low return from treasuries, which could result in global buyers looking for value elsewhere. The country where I am now pays 8.5%pa on 2 year government bonds and the inflation rate is 3.32% presently - which is far and away preferable to netting less than inflation in US treasuries. Unfortunately, they have been burned before denominating government debt is USD and now limit foreign buyers and only accept local currency. Which is just a small local example of the de-dollarfication trend. If you want decent returns, it seems you will need to sell your USD and invest in emerging economies with younger populations and growing middle classes and / or buy gold and silver.
If my Elliot Wave count is correct, we have seen a weak (wave (B)) correction upwards, that has retraced 65% of the previous steep drop. The multi-year rise has been slow and steady, but far from convincing. There are now clear signs of bearish divergence on the weekly time-frame. It was this divergence that got my attention a few months ago. This isn't a trade, it is just something worth watching. If the decline picks up, 83 would be a reasonable expectation. Of course, the DXY basket is 57% Euros and Europe is tipping into a recession, but this is how it is looking like playing out from the chart. Let's see how it unfolds.
Protect those funds everyone
Well the theory goes that the US is weak but the rest of the world is weaker, so the US market will continue on up which will support the currency. Maybe so, I am just looking at the chart.
What I do see, is an overvalued equity market and extremely low return from treasuries, which could result in global buyers looking for value elsewhere. The country where I am now pays 8.5%pa on 2 year government bonds and the inflation rate is 3.32% presently - which is far and away preferable to netting less than inflation in US treasuries. Unfortunately, they have been burned before denominating government debt is USD and now limit foreign buyers and only accept local currency. Which is just a small local example of the de-dollarfication trend. If you want decent returns, it seems you will need to sell your USD and invest in emerging economies with younger populations and growing middle classes and / or buy gold and silver.
If my Elliot Wave count is correct, we have seen a weak (wave (B)) correction upwards, that has retraced 65% of the previous steep drop. The multi-year rise has been slow and steady, but far from convincing. There are now clear signs of bearish divergence on the weekly time-frame. It was this divergence that got my attention a few months ago. This isn't a trade, it is just something worth watching. If the decline picks up, 83 would be a reasonable expectation. Of course, the DXY basket is 57% Euros and Europe is tipping into a recession, but this is how it is looking like playing out from the chart. Let's see how it unfolds.
Protect those funds everyone
評論:
Please view this in light of voices in the US executive publicly pleading with the Federal Reserve to engage in competitive devaluation of the USD vs Europe.