20.06 - is dollar under threat?
- by Anna K.
Dollar might takes hits from two direction.
We can all see the turbulence that is caused right now by Trump administration. The chaos in the markets is due to the single statements made by the officials. And a lot of countries are lest on the side of the road with no certain trading future. Those who were dropped by the USA are going to have to look for the new trading partner. And that is when their eyes might wonder towards the EU. The region has been experiencing a lot of troubles in the last couple of months and is now looking for the much-needed support from the side.
For example a free-trade agreement has already been talked over with Australia and a decision will surely be on its way very soon. All of the cash flow that was supporting dollar is going to go to another asset. But the problem with that is that it is not euro that is supporting the economy of the world. It is dollar and the weaker it gets, the stronger are the chances for the whole balance to be blown up.
Of course, American currency is up now. Being at 11-months high for several days in a row it has lifted traders’ spirits right up. it seems for now that nothing can knock greenback down, but it is only until china is ready to answer to the US about the new tariffs. We fear that after that we all not only the former partners of the US will have to turn to euro. But let’s go back to that problematic zone. The balance is a tricky thing. Once established, every movement is threatening to ruin everything. No one wants the repeat if 2008 financial crisis but if the strongest of the world are going to continue disrupting what was built the economy is going to blow up.
Once again, the source of all problems is Trump administration. But those, who have been following his statements and his action during the time in the office have to ask themselves – are we really surprised?
With all the problems in the equity markets our attention on digital coins market has been lost. But that doesn’t mean that the market itself is dead. It very much alive and there are even new assets emerging there every once in a while. But stable is not the word we would use to describe this segment of the market. With dollar being the ultimate value point against which every coin is measured jumping up and down there have been a lot of losses, but recent news made a lot of traders wondering – is it all worth it?
$32 million worth of digital coins was stolen from the hacked exchange in South Korea. We all know that online coins market haven’t been exactly following the regular established rules of a financial market and have been writing rules of their own. And this time everything is ‘according to the book’. Heist has caused crash in the market. Just like they have all those times before. But this time one thing is different – some of the traders said that they have had enough. A lot of people did begin to wonder whether the risks are worth it. Is the selloff is going to happen?
We have said that not so long ago and will repeat it once again – there is a huge possibility that the digital coins market is going to be alive once again very soon. Moreover, it may be the thing that saves trading in the world. Have you seen the things which are happening on the equity and stock markets right now? There is no guarantee that after we go to sleep today, Asian markets aren’t going to have an overreaction to the foregone earthquake in Japan and take down American and European stocks. Chain reaction is possible and it is very unpredictable. If that is the case, all of the coins are going to go up, because of the dollar going down. And doesn’t that sound nice? Not the crash, of course, but he whole huge market going up with the possibility for every asset to bring profit.
Output. This is the word that has caused a lot of troubles for the oil traders and producers around the world. And until we reach Friday we are only lest to guess what OPEC decision is going to be. But now there are complications in the talks which are going to bring even more confusion to the situation until Friday in reached.
Saudi Arabia wants to talk to all of the Gulf oil [Saudi Arabia produces Gulf oil as well] producers in order for them to support bigger oil output. There are a lot of players in this game and it seems that even those, not involved in the game, like Russia, are going to try and influence the results.
There have been a lot of talks about oil lately. Everything because of the spectacular performance with WTI and Brent reaching 3-years-high points. Current cut of 1.8 million barrels per days is to be erased by 1.5 million barrels per day raise. But the problem is that the cut helped stabilizing the situation in the markets as well as allowed Brent to gain price from $24 per barrel to $75 per barrel in just two years. This means that bigger output is going to spoil all of the situation and undermine the price balance.
We think that we have to wait for OPEC countries decision before doing anything rush because the prices can go up is the countries decide to leave the output as it is and maybe even cut it a little bit. Either way we are waiting.