The USD – what the heck is going on

An article by Gus    No Comments

The USD is still not getting the beating it deserves. With the fear of a complete government shut down looming over everyone’s heads, how we should trade the dollar is the main question needing to be answered. If you sell the dollar you are risking a lot, but if you don’t sell it you are risking just as much. The Federal Reserve FOMC member Yellen just spoke recently saying that he sees no need to change the U.S. monetary policy. Also on top of this Congress and President Obama have pledged not to have a government shutdown but instead find a way to work around it.

While the government says they will find a way to stay alive, the markets just don’t feel that way. The USD isn’t going down as much as it needs, since people still have faith in the U.S. government, for some odd reason. I have to say ask yourself a question would you invest in a company with $14 trillion in debt and no clear plan on how to turn a profit in the near future, instead just spend more and more to somehow recover from this mishap? I would never invest in such a company and this is what the U.S. is doing, they are by far one of the worse companies one could buy.

The only reason the U.S. is still being trusted and the USD bought is due to a large amount of faith that the Federal Reserve wouldn’t let the dollar collapse. I do want to bring up a question; can we really trust the Fed that much given how poorly they have dealt with the financial crisis so far?

I urge everyone to keep a close eye on the dollar, since with no change in monetary policy and a government shutdown being a very likely possibility, who knows what can happen in the next few weeks. As always good luck to everyone this week and keep making those pips.

Gus FX