If the Democratic held government in DC is able to pass the multi trillion dollar stimulus that Biden has proposed, expect the dollar to further depreciate against other major currencies for a time.
However I want people to note that this does not equate to the dollar "crashing",
I look at the trade weighted dollar index. With my understanding of the petrodollar system and the EURODOLLAR system, I know that the dollar is still in a bull market. It is FAR from "crashing".
A weak dollar makes the US more competitive and allows easy financial conditions globally. This brings in more capital and investments into the USA as it remains more attractive. A weak dollar reinforces the long term dollar bull cycle. A weak dollar makes America more competitive in global trade, bringing in more investment, capital, etc etc. which will appreciate the dollar forcing tightening conditions in EM and other heavily indebted USD denominated countries further reinforcing the dollar bull cycle.
I don’t exactly have an exact opinion about the next couple of months, because there are plenty of solvency issues between now and when things might start normalizing later in 2021, and dollar shorts are getting crowded at the moment, but as we look into late 2021 and into 2022, I remain with a dollar bearish outlook.
However I want people to note that this does not equate to the dollar "crashing",
I look at the trade weighted dollar index. With my understanding of the petrodollar system and the EURODOLLAR system, I know that the dollar is still in a bull market. It is FAR from "crashing".
A weak dollar makes the US more competitive and allows easy financial conditions globally. This brings in more capital and investments into the USA as it remains more attractive. A weak dollar reinforces the long term dollar bull cycle. A weak dollar makes America more competitive in global trade, bringing in more investment, capital, etc etc. which will appreciate the dollar forcing tightening conditions in EM and other heavily indebted USD denominated countries further reinforcing the dollar bull cycle.
I don’t exactly have an exact opinion about the next couple of months, because there are plenty of solvency issues between now and when things might start normalizing later in 2021, and dollar shorts are getting crowded at the moment, but as we look into late 2021 and into 2022, I remain with a dollar bearish outlook.