Dollar Rises Up, Beating the Other Currencies of the World
Recently, the hike of dollar against the major currencies of the world was in the news. It is known that the Federal Reserve is expected to raise the interest rates right after the increased bets by the investors. In comparison to the dollar, the sterling has only witnessed a ‘flash crash’. Yes, it has come down leaving the investors worried. The investors are now apprehensive about the exit of Britain from the European Union. According to the media reports, the British pound has almost lost its value by 4 percent when compared with US dollar.
In the Words of Various Representatives
Sue Trinh, the head of Asia FX strategy at Royal Bank of Canada in Hong Kong, has recently stated that the US dollar is continuing to grind the bigger nations. It is all linked to the changing expectations of Fed rate increase. She further added that the expected rise in December was around 50 percent few weeks ago. However, it has gone beyond the expectation by showing the rise of 70 percent, which is just incredible, she says. Sue remarks that the onus in on the data at present in order to continue with the printing smoothly.
On the other hand, Bart Wakabayashi, the head of Hong Kong FX sales at State Street Global Markets mentioned that what matters is the story of the strength of the dollar and the currency positioning. He says that this is the main driving factor.
In addition to this, Marc Chandler, global head of currency strategy at Brown Brothers Harriman stated that economic data actually hardly helps in the elucidation of the movement of sterling. He said that the UK has fared really well from the past three and a half months after the referendum. It is true that the decrease in the value of sterling is going to affect the UK’s current account balance but the amount may be balanced with the increased value of exports, added Marc.
The Current Status of Japanese and New Zealand’s Currency
While talking about Japanese currency, Yen, the surplus of the nation stands at 2.0 trillion yen. In August, this figure was calculated and was seen that there has been a swing in the trade balance due to the decreasing imports. As compared with the US dollar, the Yen was at 103.93 Yen while the dollar was last up by 0.3 percent. On the other hand, the euro came down to at $1.1133 while the currency of New Zealand came down by 1one percent and finally tumbled down to 0.7 percent at 0.7553. No doubt, after this fall, it gained the sympathy of New Zealand and US.
As far as euro is concerned, the major technical breakdown shattered the nation and dashed the two-month long consolidation pattern. James Chen, head of research at Forex.com in Bedminster, New Jersey stated that the retail sales, consumer sentiments and price index can greatly help in shaping the expectations and the movement of the dollar. The other analysts were also recorded saying that the dollar has gained much benefit after Hillary Clinton; Democratic presidential nominee broadened her lead in opinion polls.
The Bottom Line
The US dollar is continuing to scare the other currencies of the world with its incessant rise over the time. The euro fell down to 0.8 percent against the US dollar while the status of Yen and New Zealand’s currency is also dwindling. The financial representatives of the different nations of the world are presiding over various meetings and conferences to bring out an effective solution to keep up the value of their country’s currency.