claydoctor

Euro driving changes to the dollar strength?

FX:USDJPY   U.S. Dollar/Japanese Yen
137 1 3
This smells of the dollar strengthening and a US EQUITIES market dropping, for a change. We will have to see how this settles out. Might take a couple days to form and confirm a trend. Low inflation in Euro             Zone today out, deflation, could be the game changer, recent stimulus has not had desired effect, they may have to step up their game, and stim is NOT their game, they are too proud and conservative to devalue their Euro             strength, but they may have no choice, (and they don't know how to do it well, as a group of countries, slower, disagreements, dramatically effecting the dollar, and some may seek cash, pulling out of the Euro             markets for that safe haven, so dollar up may mean markets down, money flowing out, not in.
I have always felt that this was a storm that was created since its inception. Don't get me wrong, I do think the Euro helped in some cases to an extent. But it also hurt the countries at the same time. For one the countries with a higher cost of living compared to country's with a lower cost of living was effected more. For instance, the country with the lower cost of living had so much more to gain from the currency's value compared to the country with a country that already had a high cost of living and needed to the currency to either be at there natural currency's level or higher.

So when they start inflating or deflating the currency the country that has had the lower cost of living still benefits as long as the current value is still higher then its natural currency's level since inception.

Im in the US, but my concern is with the complications they should really rethink what there doing at times when they inflate or deflate the euro.

The U.S. in my opinion if this could happen is to deflate or inflate the dollar in certain parts of the country. Some areas need inflation while others need deflation during the same time. Each city or state is completely different economic wise. But that will never happen.

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