Topic: America stimulus support add strength to the dollar as investment increase (Read 271 times)

Dollar is the global currency and USA holds the power to print as many currency notes as they want. Its because of this fact dollar won't fall. In my opinion this strengthening of USD because of currency notes is temporary and won't help dollar to stand out in the long run.

I still think that it is obvious dollar is not as strong as claimed, sure you could show me some charts that show that it is profitable but the reality is that we are not there, the reality of someone who goes to work and comes back home will know the difference, their life is more expensive and their life is harder as well, there are much more people who are unemployed and many more that are making a lot less as well, people who used to be considered middle class is no longer available, there are people who barely survive and there are very rich people, the middle is very few nowadays.

So, just because there are people who work 2 jobs and barely survive, doesn't mean that there is no economical problem, that on paper looks like they are surviving but that's not alright with me. This is why I do not believe the charts that indicate dollar is strong, because life is not looking like economy is strong.

Because a lot of people on the Internet is doing the same thing and a lot of financial influencers are advocating to put their stim package on investments, this is just a herd mentality that we are witnessing and it is a double-edged sword because it can help be used for the good and for the bad, you don't really have to worry about US overprinting their fiat if you don't live in that country, I mean bitcoin is flexible and can be converted to your local fiat.

I noticed that the US dollar increased it's value against my local currency a day ago.
I guess that this is caused by a higher level of optimism across the fiat currency markets about the recovery of the US economy and the end of the pandemic.Perhaps some investors/traders are seeing the US dollar as a short term "safe heaven"(which is ridiculous).
The vaccination process gives a sense of hope,that might be false in the end.
Let's see what will happen,if all the protection,that those vaccines provide lasts no longer than 1 year.
Will the people have to vaccinate again in 2022?

It’s the nature of trading. For “some reasons” behind the “strength” of the Dollar, maybe the other currencies are weaker? Because nothing indicates that the U.S. Dollar is strong based not in movement, but in the United States’ GDP and debt.


It can, BUT HODL Bitcoin as a fall-back/back up in case it can’t anymore.

Just because USD could pair stronger or weaker against other currencies doesn't mean that it is doing better, or it became stronger, it could mean that or it could mean that other currencies got even weaker. So, let's say there is this X item you could buy for 100 dollars and 100 euroes in a world where euro and dollar is 1 to 1 equals.

Because of inflation that product becomes 150 dollars but 200 euroes, just because it went up 100% for euro and only 50% for dollars does that mean that Dollar is stronger? No because it lost 50% anyway so it is weaker, it is stronger than euro but weaker compared to what it was. That's what people are saying right now, they do not care about other currencies, we think (and I agree) that dollar is weaker, it is not stronger, not after what happened in the last 1 year with trillions of dollars printed to make it go down in value.

How could the the Fed place large buy orders for the US dollar under a QE program? Since QE is creating more dollars, what would the Fed buy dollars with, different dollars? This doesn’t make sense.

Have you guys ever thought that when Government gives away stimulus package then most of the people are trying to invest them into stocks to stay future ready and that actually benefits the government itself? I mean what if they already know this is the market ahead, and government opens up positions to benefit themselves?

I know this could be just overwhelming response to the current situation but with amount of money they are printing, it’s huge.

Okay well I'm speculating it based on what I'm seeing with the currency movement. The US dollar pairs for last week and week before did well in the pairs. For against the EU and GBP where it is paired as counter currency, it was seen to be pulling the base currencies down and also for pairs as base currency to CAD,CHF, it was strengthened up. Maybe that could be temporal though. Never take out sentiment in trading.

But for printing cash and its effect on inflation, the US can control that.

This is the same I was thinking, they are playing a dangerous game with the dollar, they are basically taking a very high risk by telling the world they are going to print all the money they want and the world can take it or leave it.

But while the rest of the world has taken it during decades despite the awful fiscal policies of the US governments the date will come in which they will just leave it and that is when the US government will learn the the dollar hegemony over the world is nowhere near as solid as they thought it were.

It’s not “my indicators”. I was merely asking a question if you, or anyone, believes that the U.S. Dollar is truly “strong” after the United States’ falling GDP, trillions in BRRR money printing backed by debt, and the coming problem of inflation. What is backing the “strength” of the Dollar?

Just to point out: I was not talking about famine literally, I was just using the expression, which applied to reality can refer to several areas. However, other countries that have printed en masse, such as Venezuela, have had famine, so I don't think it's totally out of the question, despite the particularities of the USA.

But yes, in general I agree that inflation is most likely to go another way, at least in the US.

If according to you that the strength are not there by your indicators, you understand what sentiment do to the market. Mere speculation is enough to create sentiment to drive price to direction you can't believe and now with the announcement of stimulus will create such a sentiment. However, looking at the dollar, I see some recovery and that is having influence in the crypto market.

It is really not cool for bitcoin to become such a financial asset. I know that we have profited from this a lot, and I know that we should not be sad about what's going on, but the reality is that we are not suppose to be like this, we suppose to be a currency that should be against these kinds of things.

Stimulus was a way for the government to help people, and some people putting that into bitcoin is not bad, they may want to have some, and the ones that spend crypto are fine as well, but the moment this became "let's make money" thing that went way overboard. Hell I am fine with just bitcoin as well, at least that's decent, people end up losing so much money on things that were much much smaller. Chilliz got super high recently, some people saw that and bought at the top, like seriously what is wrong with people, why buy something when it is already that high?

I believe it’s just FOREX speculators trading back to U.S. Dollars, not because of “strength”, it’s because the other currencies are probably weaker. Check the United States’ GDP, and total Debt. Is that truly the sign of strength?

There's huge money circulating around thanks to the stimulus. That's almost a couple trillion USD. So there's now stronger spending. But all this is very temporary. This is hollow money, after all. How much does each US citizen receive from the stimulus? A mere $1,400 more or less? This cannot sustain the high spending. Not to mention the negative effect it brings to the inflation rate in the long run. So this rise in USD does not mean confidence in the currency, or increase in investment, and so on. This simply means people have something to spend, but very temporarily.

If the bankers has a plan at hand as to what they are going to do with this one, I think that they should start now because as the quote above has said, money printing causes hyperinflation which means that if that were to happen, the people of USA are the ones that are going to suffer the consequences.

There will be consequences, but famine won't be one of them.
If it was another country, even a highly developed one, like Japan for example that could have been one of the scenarios but not the US. You guys are the biggest exporters of food, you are one of the only countries that are self-sufficient in all of the basic foods, from cereals to meat and milk, inflation won't be able to trigger a huge jump in imported food because it is simply too little imported and most are not of crucial importance with maybe the exception of coffee.

So famine, out of the question, but serious inflation driving other goods prices up and making a lot of things less affordable, shutting down production of those, sending people to the unemployment office and so on, that could be one of it, it's just a question on how will they manage to contain this continuous money rain.

Oh, and I'm not against stimulus money, there are people who lost their jobs and income forcefully not because of the free market economy and those must be helped but at the same time, you have to find a way that won't affect all the population long term even worse.  I just hope they do have a plan for the coming months and years as I remember clearly that once the US starts coughing Europe gets a cold too.


It's not like that, those huge checks mean only one thing, this government needs bigger bribes to keep people's mouths shut than others around the world. Plus they have a lot of promises that will most like be forgotten pretty soon, so why not start by handing out money before people grab the pitchforks?

Charts is kinda small to me and most of them are xxx/usd

I kindly like to check DXY (Dollar index) because it is not affected much if an xxx currency goes down


source: tradingview.com

According to my point of view, this could be a big long run in the next couple of years since the index has already reached its previous bottom. Well, looking forward to seeing big boy return to his playground

So true, and I'm just wondering when the famine is going to start--and I also suspect that it's going to be prolonged and severe when it arrives, so I'm not looking forward to it.  All of this stimulus and money creation that's going on all around the world can't go on forever without having serious consequences (unless I'm missing something that our esteemed economists in power know).

I don't understand currency trading at all, but it does seem strange that the USD would be increasing in value relative to any other currency aside from the extremely weaker ones.  Economics seems like so much voodoo crap these days, and I'm just hoping that our policy makers are keeping an eye on all of this and have plans for the future that don't include forcing the population to live in bunkers for the rest of their lives.

The stimulus injection is a band-aid on a 3rd degree burn. Yes, it might slow down the infection ...but it is definitely not going to stop the gangrene to kill the patient in the long run.

Yes, everyone are spending money..provided by the government from people's taxes ....but it will not be the solution to create jobs and to boost the economy in the long run. In any way, the US have a much bigger problem.... which is debt. (Most of the people go bankrupt or they have to sell their assets to pay their debt.)

But by the looks of it, the US stimulus package seems so much larger than any other government around the world is doing. Corona relief funds in Europe or Asia seems a lot smaller, which could be an explantion why people think that the US is going to come out stronger from the pandemic. Or the other explation is that the other currencies are just dropping harder than the USD. It might be just a relative strength compared to weaker countries. No matter what, it is still best to remain in cryptos and wait out this strom.

Circulation is being made thru printing money of high value like the dollar. Though sadly this tactic will only work for short term and would end horribly in the long run as it causes hyperinflation and further depreciation of the currency's value. So I'm not seeing this green moment as a sign of the times but the calm before a horrible storm. Let us see how the US government works on to comabt this in the next few months of 2021.

If the US dolllar is strengthening, its off of heavy buy volume on FOREX exchanges. Fiat currencies like the US dollar, yen and yuan are bought and sold on exchanges which can elevate or depress their value. They are very similar to cryptocurrencies in that way. The federal reserve could place large buy orders for the US dollar under their longtime QE (quantitative easing) program to quell fears associated with the dollar devaluing. That is one possible scenario for the charts OP posted. The fed has already amassed massive quantities of US bonds and other assets, it wouldn't be farfetched for them to buy the US dollar as well.

Stimulus spending and printing ever larger mountains of fiat to give people free money haven't often strengthened any currency through history. The end result of that policy is more likely to resemble the zimbabwe dollar or venezuelan bolivar at their weakest, than they are the US dollar at its strongest.

It is good to know that the stimulus added strength to the dollar and I also read yesterday or the day before is that the US dollars subdued by lower yields but I dont know the reason behind it.
I don't have much knowledge about the economy but the stimulus won't it affect the country's economy since they already have some debt to pay.

OP, you're looking at a way to a smaller timeframe to actually be relevant.

The stimulus package isn't something that was discussed at 8 am, approved at 9, and money sent at 10, the whole deal happened over months and months, and if you spread the graphs of the pairs to a longer period you will se that the EUR/USD pair was 1.08 rather than 1.19 a year ago and 1.13 two years ago, so actually this rate is one of the worse apart form one period in the last 5 years.

The slight increase comes from the good news about the vaccinations and the fact that at this point another lockdown is clearly off the table, so people are expecting that soon the economy will start functioning normally, manufacturing will pick up, exports will do the same driving the need for $, the stimulus money can't have any positive impact on the exchange rate, more likely it can drive it down with a rise in imports.

 

That's actually the purpose of the stimulus and they seem to be not showing any clue when they're going to start. And after that, we might see the negative impact of it on the economy.

Most of the countries are coping up with a recovery plan and mostly, they've the same plan of printing money to give aid for the response to the economic fall down due to the pandemic.

Feast today, famine tomorrow.

Something weird is going on with that. It's not normal that they won't stop printing massively and the dollar is strengthening, though I guess it's due to 1) Pure short-term fluctuation/variability 2) Other currencies are printing a lot more. Let's not forget what's going on with the Turkish lira lately.

The stimulus support by the America government seem to have started building more confidence in the economy as positive outcomes are being achieved and that is showing some green on the currency unlike it was last year but now, it seem the US economy is finding her fit into stability which is reflecting on the currency lately. Looking at the chart below, is obvious that the dollar is gaining strength and that is reflecting on dollar pairs.