Currency News: Is The Party Over For The Dollar?
The US dollar has dropped after President Trump’s recent remark that the dollar was “getting too strong”. He appears to prefer having interest rates remain low. Sometimes a low interest rate is necessary to boost the economy.
Among President Trump’s campaign promises is to stimulate the economy, bring jobs back to the US, and put America’s economic interest before others. Perhaps a weaker dollar is necessary to encourage jobs to return to the US. President Trump explains his position of the dollar’s value, that “it’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency”. Although American consumers will not be pleased, but a weaker dollar may be necessary to stimulate export if other countries have a stronger purchasing power. The the 10-year US Treasury yield has dropped by 13 basis points this week. This makes it the largest drop since President Trump was elected.
However, maybe the dollar could reverse coarse. The Federal Reserve could reverse the dollar’s slide by raising its interest rates in June.
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