USD risk

"Europe has been here before. The euro was worth $1.49 in 2011, when strong growth prompted the European Central Bank to raise interest rates."

"Philip Lane, the European Central Bank’s chief economist, created a furor last week, and caused the euro to weaken, when he said at an online forum sponsored by the Central Bank Research Association that the exchange rate “does matter” to policymakers. Even though he was stating the obvious, and emphasized that the European Central Bank does not aim for a specific exchange rate, seemingly innocuous statements can have unintended power when they come from a top central banker."

https://www.nytimes.com/2020/09/10/business/ecb-euro.html

 

That is exactly beggar thy neighbor policy.

 

It sounds like a plan, Add 20 know nothing opinions together you will end up with a great basket.

 

The EU monetary union is suffering from "Germania". One way to fix it would be to kick Germany out of the Union and let the rest of the countries proceed rationally. The other solution is better, but it would require talking some sense into Germany.

 

“This [focus on the euro] is more true than it’s ever been,” said Seema Shah, chief strategist at Principal Global Investors . “Interest rates are so low that any further cut is not going to have much of an impact and runs the risk of making things worse. So why bother? Simply to target the euro.”

 

Yep. German manufacturing and German exports and the Bundesbank dominate European Banking policy.

 

The truth is USD hardly change much over the past 4 years.

It changed massively between 2003 to 2016.

 

The DX has come off pretty hard since April.

The DX is off about 7% from 2019 levels.

The Euro has gained about 10% against the US Dollar in 2020.

 

I am running an automated futures trading system which, among others, uses several forex futures. I noticed lately that USD is going down. Not only versus CAD, as you mention, but versus all currencies I track: AUD, CAD, CHF, GBP, EUR, MXP and NZD. Only USDJPY seems at a more neutral level.
The explanation for this drop in USD I do not know. Whether it is political in nature, or linked to changes in USD interest rates, or in how markets think that various countries will recover from the Covid pandemic.

 

right.

way back in 2002 - 2008 , the euro doubled against the US dollar.
it must be a very hectic life for bankers, CEOs, politicians ...