I’m new here, and I was reading some of the posts. My question is why are these posts regurgitating the strength of the recovery [is the reason] for the reversal in the dollar? In fact, the change in direction began last Thursday after the EU announced an additional stimulus. Since the dollar index trades in relation to other world currencies, and the yen and euro are showing weakness, the corresponding strength in the dollar comes from this.

Frankly, I was hoping to see some independent review here, rather than the regurgitation of what the rest of the talking heads are saying.

Why is no one telling the truth?


In order to answer your question, I must make an assumption. I added “is the reason” to your question, as I assumed you accidentally left it out. If this assumption is incorrect, please write again to straighten me out.

Your conclusion that the recent strength in dollar correlates to the EU’s recent measures to bolster the economic environment is true, but it is not the only factor driving the dollar. The world is complex, and world currencies reflect this complexity in the reasons that drive people to buy and sell them. It is not enough to attribute the dollar’s movement solely to the weakness in the euro and yen, and to dismiss the U.S. economic indicators as irrelevant. What the U.S. economy does affects the dollar, along with the factors you mentioned, as well as others beyond that, such as the actions of the U.S. Federal Reserve and commodity prices. Global currencies are interconnected to the point where singular cause and effect is influential, to one degree or another, but not completely decisive.

I am no fan of the “talking heads” myself, but sometimes the facts are so obvious that reality cannot be passed over for fantasy. The idea that the U.S. economy influences the movement of the dollar is not fantasy.

As to the other commentaries on this site, I find quite a diversity of opinion about a wide variety of pertinent topics. To me, gathering different perspectives helps to formulate a more accurate macro picture.

Finally, what exactly is “the truth?” What you know might be your “truth,” but, generally speaking, people who write commentary are expressing their opinion, and when those opinions don’t match your truth, it does not mean they are untrue. It simply means they interpret a set of facts differently than you do. Keep this in mind and a broader picture of reality will emerge for you. This is a good thing.

Trade in the day; invest in your life.

Trader Ed