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What happened to the dollar? After a rally through the spring, it's slumped against euro and yen...

What happened to the dollar? After a rally through the spring, it's slumped against euro and yen on soft U.S. growth and euro stabilization. Or could it be ... China? The smart time is now, after all, for China to quietly rebalance away from the dollar.
Comments (10)
  • D. McHattie
    , contributor
    Comments (1826) | Send Message
     
    I would say that it's always the right time for China to 'rebalance' (ie: run for the hills) away from the dollar.
    7 Aug 2010, 09:24 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4009) | Send Message
     
    "He that goes a borrowing goes a sorrowing."
    - Ben Franklin
    7 Aug 2010, 09:30 AM Reply Like
  • tadpole76
    , contributor
    Comments (164) | Send Message
     
    The dollar is not trading as a safe haven right now. Right now, it is looking the ugliest of the majors based purely on its short to medium-term economic fundamentals and interest rate differential outlook. The Europe problem isn't over yet. The structural shortcomings of the euro will take many years to resolve. A failed bond auction, negative economic data could send the currency down. The US government has created a lot of uncertainty with recent passage of health care and financial legislation. Not to mention the anxiety over the pending expiration of the Bush tax cuts. The issues will need to be resolved with diligence. The dollar LIBOR rate continues to fall as well. All of these things make for no incentive to buy the dollar right now. The yen looks more safe only because the majority of Japan's debt is held domestically. But fundamentally, it's more ugly than the US dollar.
    7 Aug 2010, 11:28 AM Reply Like
  • Mad_Max_A_Million
    , contributor
    Comments (1175) | Send Message
     
    Bush knew that with 5 dollar gas, he had to push the FED and the economy to the limits or the system would crash. Well, he did that and time ran out and it did crash. In comes a progressive menagerie that decides it needs to
    A) blame it all on Bush and
    B) kick the can down the road so as to pole vault into the next election.
    Well, the can is about to hit the street and it ain't real pretty. GM could have survived a bankruptcy, kicked out the unions, and came out with a plan to succeed. Now they have a union more powerful than ever. And yes, they will fail somewhere down the line and the dollar will be there to meet them.
    So goes GM - So goes America.
    7 Aug 2010, 11:29 AM Reply Like
  • Swass
    , contributor
    Comments (419) | Send Message
     
    .. or it could just be the first large correction we have had since the USD started to rally late last year. Geez, why is everyone always looking for some geo-political reason for something to happen. Sometimes things just sell off because they are too heavily overbought.
    7 Aug 2010, 11:59 AM Reply Like
  • buffettjunior
    , contributor
    Comments (138) | Send Message
     
    Chinese determine the fate of the eoro and dollar like it or not

     

    as a professional investor that has been clear to me for along time
    7 Aug 2010, 12:35 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2878) | Send Message
     
    Whenever the world economy picks up and financial stress decreases, USD goes down;

     

    Whenever investors think the world economy goes down the drain and banks are about to go under, USD goes up.

     

    For the US economy itself, declining USD is mostly beneficial, and the only major drawback is that consumers pay more at pumps.
    7 Aug 2010, 01:37 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Strippers don't even kneel down for dollars anymore. I have to slip commodities in their g now. Something they can eat, like a Slim Jim or a king size Snickers.

     

    The dollar is as limp as John Kerry in a brown bomber jacket.

     

    I fart dollar bills and its like a confetti parade at an Ethiopian circus.
    7 Aug 2010, 01:44 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    Weak dollar= strong exports. This very well may be "homegrown"

     

    Audit the Fed.
    7 Aug 2010, 02:59 PM Reply Like
  • Jolly_Rancher
    , contributor
    Comments (546) | Send Message
     
    Scenarios:

     

    1) Dollar falls, then exports rise, imports fall, so trade balance improves; treasury rates stay low, government and corporations cheaply borrow. Stocks rise, corporations issue stock. All is good.

     

    2) Dollar rises due to panic; treasury rates go to zero, Fed buys mortgages, government and home owners cheaply borrow. Stocks decline. More people are laid off from jobs, so corporate earnings rise. Everything bounces and we're back to 1 above.

     

    Repeat till game changes. Game changes occur solely at the discretion of the refs in the short term and the team owners in the long term.

     

    Note, interest expense on the US Federal debt has been declining since 2008 despite the fact that the deficit has risen dramatically. Well, that's what one might expect with rates near zero.

     

    www.treasurydirect.gov...
    7 Aug 2010, 04:46 PM Reply Like
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