US Dollar Heads to Bottom

Friday 18 December 2020, 2:56 AM AEST - 2 months ago

Dollar strength index on hourly candles, Dec 2020

The dollar lost another 0.7% today, continuing its downwards trend that nears 2018 lows.

The currency has fallen by some 13% in its strength index since March, down from 102 to now less than 89.

It has lost significant value against many currencies, including the euro and even the brexit ravaged pound.

Dollar's value against many currencies, Dec 2020Dollars value against many currencies, Dec 2020

Swedish krona has gained the most on a tight monetary policy, as has the Chinese yuan which has gained some 10% against the dollar.

Losers at the bottom are gallopingly inflating Argentina and speculatively attacked Turkey, with the Brazilian real losing significantly too.

Switzerland however has been the second biggest gainer and that has worried their central bank considerably, intervening to temper the safe haven money by the stock traded central bank.

That led America to call them a currency manipulator, arguing the Swiss central bank intervention this year has amounted to 14% of their GDP.

This has created a rise in the trade surplus they say, which is apparently due to gold exports, presumably to escape the devaluing dollar.

Foreign exchange market interventions are necessary in Switzerlands monetary policy to ensure appropriate monetary conditions and therefore price stability, Switzerland said.

The dollar strength index on monthly candles, Dec 2020The dollar strength index on monthly candles, Dec 2020

The dollar has been weakening for decades, but it was bigly dominant in the 80s and 90s, with the picture quite a bit different since 2002.

Presumably they printed and printed to fund all the wars of that decade, with more printing following to bail out the banks.

We get a bottom of ...

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