I might be the minority opinion here but, if all the other countries China, South Korea, European Union, Argentina, etc. economies are now struggling and trying to drive up exports, devaluating their currencies is the first natural step to make the cost of their products cheaper, wouldn't that drive the value of the dollar higher and not lower? A lot of these currencies are paired with the US dollar. China should drive its currency lower as a minor counter measure in view of the US imposing 30% tariffs on Chinese products. Also, with the very low interest rates, the world over, wouldn't foreigners now invest their monies in the US? Buying real estate, stocks, even treasury bills in the flight to safety? Wouldn't that drive the value of the dollar higher? When there is demand for something, the prices head higher and not lower?
I am massively short the USD.
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Why not just go long on gold and save the short fees? If the dollar is devalued it will be painfully obvious in the metal price.
Second that. US has a high nominal rate but also a high inflation rate, G10 real rates are better comparison and with the tariffs/inflation/etc the OP mentioned, either he predicts real rate go negative or betting inflation to remain subdued. Also, I disagree with his reasoning on devaluing usd for trade and debts which have been raised decades ago, as usd is not just any currency but with an exobitant privilege and responsibility. An intentional devaluation will wreck havoc on global markets
Glad to see there are at least a few who do understand the significance of the US dollar and the intricate relationships in global markets. Perhaps some are way too closely glued to Trump's mouth. Better to listen to what Powell has to say, even in the medium term his words have much more weight and impact on rates and the dollar than anything Trump could do or say.
I DON'T KNOW, but IMO if FED announces a rate cut, value of the dollar would probably drop and money would flow into equities because of cheaper interest rates- boost for the economy. Atleast that's my thesis.
Also OP, you were too early ;p. As mentioned i wait mon/tue/wed for ideal opportunity for the high of the week to be put in. Also consecutive daily green bars, i'd never short. But i think it's potentially very VERY close. Question is, how wide is your stop and how much can you draw down?
the position size mentioned is way over my head and not qualified to comment, but as far as the trade logic goes, corr(PL, logic) = 0.. might make a killing but it wouldn't be due to the logic if it can even be called logic
The US has control over its monetary policy with the Federal Reserve and President Donald Trump too with his tariffs. That said, other countries will do what is in their best economic interests. That would be to devalue their currencies and possibly, multiple times too! The China-US trade war is in the news but, there are other trade wars happening and is about to happen! South Korea-Japan is already in full out trade war with each other. Next, we will have the European Union-US, European Union-UK, European Union-China, Asian countries-China etc. Negative interest rates are very likely, for a lot of countries but, monies still have to be invested where it will give one a decent return. The US stockmarket seems poised to receive a huge influx of monies seeking higher returns.
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