Reinko

Forex: Why the Dollar Is Staying Strong

We have to take into account that dollar moves these years are often not good to explain, for example lately European inflation was reported at 1.6% instead of 1.8% (while core inflation still above 2%).

That gave an intraday swing of 2% on the €/$ pair.

Later Obama stated that trillion deficits will be there for a couple of years and almost nothing happens...

There simply is no economical theory that explains such weird behavior; one thing is clear:

Those who have the deep pockets to steer the value of the dollar neglect large parts of what the real value should be.
Don't forget: In the 600 trillion nominal value in the OTC derivative markets a tremendous amount is bounded to currencies; if we would have more insights who has what kind of derivatives you might better understand the weird weird behavior of the US dollar.

It might very well be that if the dollar gets too weak, a few trillions must be paid in the derivative markets...

That is not unreasonable.

Compared with Canada, U.S. Economy Looks OK

Canada having a problem because there was a small contraction?

After all these years I still do not understand why the Americans think that (small) contractions equal to death.

Contractions are just as natural as your sleep.

And don't forget: If you adjust the US GDP growth for all that extra debt, the USA is contracting for a lot of years already. Right now the US economy has over 50 trillion of debt standing over herself and it routinely grows about 8% a year (that's about 2 to 3 times the long term GDP YoY growth by the way).

No no Grace: Your looks are charming but your brains are not...