Monday, July 27, 2015

Dollar is tanking

Dollar down over 100 pips against the yen this morning. Euro is up over 1.11. Even very weak currencies like the NZ dollar are getting into the act, up 80 pips overnight.

What's causing this?

Not sure, but I have been saying that U.S. Federal Gov't spending has been slowing. This may be starting to be felt through purchase/supply channels, etc. Forex markets reacting.

As for the euro, I don't think there is huge upside because if the U.S. economy weakens as a result of a spending slowdown, then European exporters will start cutting prices again. Furthermore, Greece is not out of the woods; it just bought some time with the new bailout deal.

Anyway, I am a trader. If the dollar is falling now I am shorting it. By the short USDJPY position, which I have had on for two weeks is near turning a profit now.


Anonymous said...

A german business sentiment survey resulted in a price spike for the euro, while a relatively strong durable goods report from the U.S. was shrugged off. I'm getting the impression a lot of people are emotionally invested in seeing the dollar fall.

Joe said...

I think today was a technical bounce, euro still been making lower lows and lower highs since 5/17/15. Earlier, I actually shorted the euro futures at 1.11. If a sell-off doesnt pick up by tomorrow I'll stop myself out

Anonymous said...

Now that I think about it, maybe this broad sell-off is a response to what's happening in China. Some people afraid the Fed will put off an interest rate hike, maybe?

I'm short on the euro myself and currently well into the red, but I can't stand taking losses and will ride it out at least until the Fed meeting Wednesday.