I'm eyeing a significant decline in the U.S. Dollar Index (DXY) from its current level around 103, down to 25, driven by escalating inflation, competition from Bitcoin and gold, and the influence of BRICS nations. Should this substantial DXY drop materialize, it would likely benefit commodities, emerging markets, export-oriented economies, cryptocurrencies, and gold due to the inverse relationship they share with the dollar's value.
The recurrent raising of the debt ceiling exacerbates the country's debt load, potentially weakening trust in the U.S. government's ability to service its debt, which in turn could significantly devalue the dollar.
Inflation: If the dollar drops that much, it could lead to inflation or even hyperinflation. The cost of goods and services could rise, which would decrease the purchasing power of the average American.
Interest Rates: To combat inflation, the Federal Reserve may increase interest rates. Higher interest rates can make it more expensive to borrow money for things like mortgages or student loans, which could affect the average American's ability to finance major purchases or manage their debts.
Euro "or the anti dollar" would have to become a safe haven currency. in which it will never be. Eurusd is gaining due to euro zone interest rate hikes. DXY normally finds a bottom given a variation of a few % once the Fed has completed it's rate hikes cycle. then it gains in value. if the Fed loosens it will cause a decline but most likely short lived. look through historical price action and rate hikes history. nothing in history would suggest DXY or the dollar will come close to 25. you've outlined unlikely scenarios. Bitcoin will never be a substitute for the US dollar. that's just plain Bitcoin community psychosis thinking.
MichaelBsul
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@Artisin, Thanks for the feedback. My levels in box #3 have 45-50 as targets too. Do you think this is more likely? Thanks
ForexTubers
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how did you come up with 25?
MichaelBsul
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@ForexTubers, the first box is the main schematic. You can see the macro respect it in 1992 to now forming an ABCD fashion scenario where E would be the next boxes (25). However long it may take that's what I see on a big time frame. But that is a long term finale target. The third box has more realistic micro targets of mid 90's... then once that is lost on #3 its going down and will base itself off of #3
ForexTubers
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amazing fundamental analysis
LevRidge
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lol
Trade_Navigator
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DXY 25 not likely. DXY will more than likely remain far above that level. Bitcoin hitting 25 at some point is a more likely scenario than DXY ever hitting 25.