US Dollar Pressures
Trader Scott’s Market Blog
October 11, 2016
There are a lot of folks out there who believe there is tremendous pressure on the US$. Agreed. However, most of those folks believe the pressure is to the downside. I believe the opposite. There are plenty of logical reasons to assume that the US$ is heading much lower. Agreed. But it’s all about the timing of it. I do not see a situation where the trillions outstanding in US$ based debt can have any effect but to push the US$ higher, possibly much higher. And combined with the disaster sitting in the European and Japanese (the US isn’t much better, but that will likely be the last to go) banking systems, thanks to many factors, including the insanity of negative interest rates. And what in the world is going to happen to the massive hedge funds, oops excuse me, central banks, when all of the negative yields which they are loading up on go to positive yields. And then keep going to even positiv(er) and positiv(er) rates over the years (meaning lower and lower prices). Who’s going to bail them out? And much of the debt which they are loading up on is low credit quality to boot.
But back to the US$. I do believe much of the recent rise in government yields (falling prices) is due to central banks (i. e. hedge funds) selling US Treasuries to support their own currencies. They know there is upside pressure on the US$, they can see it. And yes, the Fed will continue to attempt to fight it. But I’m not real great with fundamentals. I prefer to rely on my judgement of LIQUIDITY FLOWS/supply and demand via charts. So attached are annotated charts with my view of where we are in the US$.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.