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Join Date: Dec 2001
Location: Cambridge, MA
Posts: 44,315
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Dollar vs. Dow
I follow the value of the dollar and have seen it decline in the last 8 months, have wondered why. Market has been the inverse.
Article from yesterday's NYT. https://www.nytimes.com/2017/08/01/business/dealbook/dow-22000-stock-markets-dollar-value.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news Any thoughts on when and why the Dollar will rebound? 
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08-02-2017, 09:35 AM
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Location: Linn County, Oregon
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Just wait. Tabs will 'splain it.
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"Now, to put a water-cooled engine in the rear and to have a radiator in the front, that's not very intelligent." -Ferry Porsche (PANO, Oct. '73) (I, Paul D. have loved this quote since 1973. It will remain as long as I post here.) |
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08-02-2017, 10:01 AM
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Open Highway Productions
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It is One Big Confidence Game at our expense.
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"If one does not fail at times, then one has not challenged himself." Ferdinand Porsche |
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08-02-2017, 10:22 AM
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Location: Lawrenceville GA 30045
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Quote:
 My guess as to his answer is Fed policy and continuous printing of those 100's......
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Mark '83 SC Targa - since 5/5/2001 '06 911 S Aerokit - from 5/2/2016 to 11/14/2018 '11 911 S w/PDK - from 7/2/2021 to ??? |
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08-02-2017, 01:41 PM
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Probably a yuge oversimplification but, there is a ton of liquidity in the market(s) currently. Too much liquidity = monetary deflation.
A weak dollar is also in the best interest of any company (including those on the DJI) in emerging markets, which is nearly everyone these days, and there are many new markets being targeted/exploited. BRICs are like, so 2015...
Last edited by Eric Coffey; 08-02-2017 at 02:46 PM.. |
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08-02-2017, 02:00 PM
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Join Date: Apr 2001
Location: Linn County, Oregon
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Quote:
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"Now, to put a water-cooled engine in the rear and to have a radiator in the front, that's not very intelligent." -Ferry Porsche (PANO, Oct. '73) (I, Paul D. have loved this quote since 1973. It will remain as long as I post here.) |
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08-02-2017, 02:12 PM
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Location: Palm Beach, Florida, USA
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There are a lot of factors at play, but here are the edited highlights. The large US stocks that make up the industrial averages are all multinational complainies that are based in the US so their currency is the US Dollar. When the dollar goes down it makes their products more competitive in the rest of the world. As a result, US-based multinationals are seeing bigger than expected earnings because of the exchange rate. A few months ago the same companies were still growing because they have large exposure to the US market that prices in dollars, but they faced huge headwinds trying to sell into foreign markets with a rising dollar. This quarter brings the trifecta of good US economic demand, growing ROW demand, and a falling US Dollar.
The Dollar is declining because we have low interest rates, we are perceived to be poised for tax and regulatory reform, and the Dollar has had a heyday against the Euro and other foreign currencies simply because those economies were basket cases. Now that they're stronger it's safer to put money in those countries, which lowers demand for the USD. All in all it's a good thing.
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08-02-2017, 04:43 PM
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Quote:
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08-04-2017, 01:54 AM
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Join Date: Apr 2002
Posts: 30,441
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Not a bad thing...looking at the big picture. |
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08-04-2017, 02:02 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The FED controls the Over Night lending rate that banks get..The FED would like rates to be a bit higher but are stymied by a weak economy.
Market forces determine Treasuries as buyers bid on Treasuries to purchase. There has been massive inflows of capital into the US essentially since 09 as a flight to quality and safe haven in a sea of global uncertainty. The same has been true of USD strength. The benchmark rate to watch is the 10 year note which is as I write is 2.23%. The low on the 10 yr was apx 1.47% in 2016 which reflects extreme pessimism in the Global economy. At 2.23% one can not consider it to be optimism. Trump said the USD was too strong...and after he said that it fell off a cliff. The real reason is political turmoil in the US along with weak US economic data. So capital is now moving off shore as the US isn't being seen as being as safe as it was. While the EU Central bank is expected to tighten interest rates due to a strengthening economy. EU economic data is the big reason why the USD rallied in 2014 and now that the EU is doing better the tide is going out on the USD. As far as one can see it is ebb and flow of valuation.
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08-04-2017, 04:44 AM
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2003 BMW 330Ci
