Interesting Foreign Currency Movements


Staff member
Alchemist I want to know what is the message for us in this interesting analysis!

USD is getting stronger and rest GBD, YEN and EURO are getting weaker!

USD is going to go much higher as trend has clearly changed!

What does this has in store for us?
A lot of short positions had been created in the US dollar in the last few months.

These are currently unwinding. These unwinding may go on for some more weeks.

US economy has fared better than the Europeans economies in last few months.

This is because of various reasons:

-Aggressive rate cuts by Fed.
-Already weak USD boosted exports.
-Stimulus package provided by the US government.

This better-than-expected economic performance started a trend reversal in US dollar.

Another reason may be that money is moving out from emerging markets like Russia and Brazil and going back to the US.

These markets have corrected substantially in last few weeks.


The India Rupee has crashed as the capital inflows have dried up and the oil import costs have gone up sharply.

INR may remain weak till end of this year.