Greenback is heading lower again today, dropping as risk appetite comes into focus. But, even without the good news that is driving risk appetite right now, there is a good chance that the US dollar would be showing weakness, thanks in large part to the current race to the bottom for currencies.
Right now, some currencies are in a race to the bottom as countries attempt to stimulate their economies by devaluing their currencies. Japan has spent years intervening in the markets to try and keep the yen weak in an effort to help the economy. With so many countries employing some form of quantitative easing as a method of economic stimulus, it’s no surprise that the current situation has been dubbed a race to the bottom.
This is a race, though, that the United States appears to be winning. With the latest QE program from the Federal Reserve, an unlimited injection of $40 billion a month, it will be hard for other countries to keep up. And, if the US economic recovery picks up the pace (the latest jobless claims data is helping right now), the greenback could lose even more ground in the future.
At 12:56 GMT EUR/USD is up to 1.2923 from the open at 1.2875. GBP/USD is up to 1.6034 from the open at 1.6006. USD/JPY is up to 78.4815 from the open at 78.1815.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
