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Hi all, the US Dollar has recently weaken from the highs of almost $90 to the current levels of $75+.


Chart from Bloomberg

The US Dollar, whether you like it or not, is the de facto reserve currency at the moment.

Therefore in our journey of Forex trading, i feel that it is important that we follow the ups and downs of this currency.

Amid current reports of alternative reserve currencies, a run on the dollar, dollar strength to rebound etc, views are confusing to say the least.

I think it is appropriate for me to create a new section on my humble blog for the US Dollar.

I invite you to join me and explore possible situations and scenarios together!


In today’s introduction article, let’s explore the 5 possible factors pressuring the US Dollar to be weaker.

* Gold is at a high of around $1050

Gold, being priced in US Dollars may put pressure on the currency as more and more of it is required to buy an unit of it

* US Government Total Public Debt ( Figures from 10/15/09 ) stands at 11,946,703,132,807.34

A huge debt no doubt dampens confidence in the currency

* US current account deficit at almost $100 Billion ( Sep 09 from BEA )

This means that more dollar flows out of the US than in. Having surplus overseas may reduce demand for the currency and hence weakening it

* Central Banks reducing US Dollar reserves

Less demand for US Dollar and negative in sentiment

* Reports of trade agreements between countries denominated in other currencies

Less demand for US Dollar as there is no need for it

* Talks by US official on the importance of a strong dollar but an apparent lack of actions

Contributes to a perception of a lack of support from the US Dollar’s home ground dampens would be investors confidence

There are definitely more reasons than the above and we do have to put in effort in our homework.

Forex trading is never easy :)

Let’s stay tuned as events unfold with regards to the US Dollar.

Trade safe.

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