U.S. currency under plummeting trend: "Against Trump odds, the dollar stays unscathed!"
In the midst of a fierce struggle between economic giants China and the United States over tariffs, the almighty dollar has taken a significant hit. But fret not, because as James D. Touati, famously known as "The Wolf of Zurich," points out, this financial tsunami could be an unexpected boon for shrewd investors.
The title of "king" in the world of currencies has been knocked off the dollar's crown, sending it plummeting in the foreign exchange market. "Good ol' Donnie (Trump) dropped the mother of all bombs: 145% tariffs on China," mused James D. Touati in an exclusive interview with our site. The fallout of this abrupt announcement shattered the calm of the market with the whiplash of soaring volatility, dragging the S&P 500 down like a stone in a raging storm.
To add fuel to the fire, Trump put pressure on the Federal Reserve to cut rates, while inflation continued its inexorable rise. The inevitable result? Panic on the streets, market chaos, and soaring volatility... until Trump abruptly changed course, settling the storm, but not before China fired back with the threat of sanctions against the U.S. and its allies, blacklisting several American companies, and weaving a diplomatic web in Southeast Asia to counter Washington's influence.
So, you might be wondering, "Will the euro ‘take off to $1.20 in the coming weeks'?" When the dollar exacts its revenge on other currencies, the ascent can be nothing short of spectacular! The gold market has been turbocharged, smashing records at a whopping $3,500. But don't be fooled: gold isn't a currency for everyday use; it's the ultimate saving grace. The dollar, on the other hand? It remains the one and only king of currencies, the linchpin propelling the global monetary system, and it won't be dethroned anytime soon.
The dollar's reign has shown signs of weakness only three times: from January 1969 to December 1979 (-33%), then from May 1985 to August 1992 (-52%), and finally from May 2001 to June 2008 (-41%). But after those brief dips, the dollar bounced back with a vengeance: witness a staggering 101% rebound from December 1979 to May 1985, and an impressive 55%bound between August 1992 and May 2001.
Even with the emergence of crypto since 2009, none has managed to rock the dollar's throne. "As soon as the greenback (dollar) weakened and U.S. bond yields rose, Trump showed that the dollar still has what it takes," said The Wolf of Zurich, who considers the dollar a smart investment: when gold weakens, the greenback gains strength.
All this commotion raises the question, "What have been the safe havens in this market turmoil?" Well, my dear investor, the dollar remains not just a refuge in times of storm, but the cornerstone upholding the ever-shifting world of finance. So, stay grounded, hold on tight, and remember: the dollar is always top dog.
Now, for the nitty-gritty details: a prolonged slump in the dollar's value could have far-reaching effects. For starters, it would bolster the competitiveness of U.S. exports, making American-made products more attractive on the global market, which could ignite American economic growth and help reduce the hideous trade deficit. Alternatively, imports would become more expensive, potentially driving businesses to relocate their operations stateside, as per the Trump administration's wishes, according to Le Loup de Zurich.
But not everything is sunshine and roses. A weaker dollar would exact a heavy price from foreign investors holding dollar-denominated assets, shrinking their purchasing power and even causing capital outflows. Furthermore, the rise in import prices could fan the flames of inflation in the U.S., making life harder for the Fed to keep prices in check. On a global scale, a weaker dollar might compel some countries to accelerate their cushioning efforts by diversifying toward other currencies, such as the Euro, thereby fortifying the Euro's role as an international reserve currency.
In conclusion, amidst the drama and spectacle, let's not get too carried away. The dollar's reign may waver, but never waver it shall. The current storm is but a passing episode in the grand saga of the dollar, where the greenback continues to rule, despite tremors and antagonists. Buckle up, friends, keep calm, and remember: the dollar will always be the grand finale.
Momentum, our premium investment letter on the Stock Exchange, accurately predicted the dollar's descent this year (2021) and its impact on the stock market, including the NASDAQ and the FTSE 100, to name just a few. Our investment strategy has significantly outperformed the FTSE 100 since the launch of Momentum. So why not take advantage of this knowledge by signing up for an annual subscription? With this offer, you get to enjoy 5 months for free - you can't beat that! Click the link provided below to learn more.
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The dollar's reign as the king of currencies has taken a hit due to the trade war with China, making it an unexpected opportunity for investors who are well-versed in the intricacies of the financial markets. Despite temporary dips, history indicates that the dollar tends to bounce back with force, making it a smart investment, according to James D. Touati, widely known as "The Wolf of Zurich."
Should the dollar continue its slump, it could potentially bolster the competitiveness of U.S. exports and ignite American economic growth. However, a weaker dollar would also pose challenges, such as decreasing the purchasing power of foreign investors and potential inflation due to rising import prices. Nevertheless, the dollar's long-standing role as a safe haven in times of market turmoil remains unchallenged.
