Why is the dollar tanking?

Well, the DOW is doing great but the dollar is tanking...

Website

If you look at that graph you can see the value of the dollar has been plummeting since Nov. What happened in Nov?

NBC

A falling dollar gives American companies a chance to offer their products at bargain prices overseas. So unless you’re traveling abroad or buying imported goods, a continued slide in the dollar can be a good thing. But a falling dollar has other consequences that are not so obvious and, in some cases, not so pleasant. For starters, those record low interest rates that have made borrowing so cheap may soon begin moving higher again.

So foreign investment should be up with a falling dollar right??

Is dropping the value of the dollar part of the Trump agenda to increase foreign investments and overseas trade?



Effects of dollar devaluation

1. Exports cheaper. A devaluation of the exchange rate will make exports more competitive and appear cheaper to foreigners. This will increase demand for exports

3. Increased AD. A devaluation could cause higher economic growth. Part of AD is (X-M) therefore higher exports and lower imports should increase AD (assuming demand is relatively elastic). Higher AD is likely to cause higher Real GDP and inflation.

Does this mean the Fed is printing money again??

a reply to: toysforadults

not to sound like an ass, but Economics 101.
www.investopedia.com...

The correlation between any two variables (or sets of variables) summarizes a relationship, whether or not there is any real-world connection between the two variables. The correlation coefficient will always be between -1 and +1. These two extremes are considered perfect correlations. A negative coefficient means that the two variables, or sets of variables, will move in opposite directions (if one variable increases, the other will decrease); a positive coefficient will mean that the two will move in the same direction (as one increases, the other will increase). Read more: What is the correlation between American stock prices and the value of the U.S. dollar? www.investopedia.com... Follow us: Investopedia on Facebook

a reply to: toysforadults

And income never even comes close to the inflation that occurs during a depreciation of the dollar. If you thought your pay raises we bad before, wait till you need a 3% raise every month just to keep food in your house and gas in your car, and never mind the soaring cost of basics like clothes, electric, water etc...

a reply to: network dude

Not to sound like an ass but why don't you go ahead and explain why the dollar would be losing value while the stock market rises?

Do the rich get poorer with a shrinking dollar?

a reply to: MOMof3

No they benefit from foreign investment and all the money flows to the top so they actually get richer with a weaker dollar because average has to spend more.

The value for them really comes when the Fed begins to raise rates again.

a reply to: network dude


If I read your link correctly, the value of the dollar should be going up with the stock market.
But it is going down instead.

Did I not understand the article?

originally posted by: Bluntone22
a reply to: network dude


If I read your link correctly, the value of the dollar should be going up with the stock market.
But it is going down instead.

Did I not understand the article?

The article he linked makes no sense and has no bearing on what is currently happening.

a reply to: toysforadults

network dude is always an ass. It is the reason he brought it up. Plus you might want to consider his source. Not really an economics major's place stamp.

The U.S. dollar is tanking due to various reasons he can;t explain.

a reply to: ZeusAdur0

From what I know as an amateur the value of the dollar should be increasing with the DOW.

What should be increasing in value right now is precious metals not the market.

Is this a major bubble forming?

a reply to: toysforadults


Low interest rates are a major cause in my opinion.

a reply to: Bluntone22

Yeah but the interests rates have actually gone up since Nov.

Still doesn't explain it.

a reply to: toysforadults


An improved economy also takes a chunk of the blame.

a reply to: Bluntone22

Hmmm, I don't know.

The DOW began rising at the same time the dollar began falling.

The laws of supply and demand would dictate that there is more available money right??

Shouldn't the dollar be going up in value?

originally posted by: toysforadults
The laws of supply and demand would dictate that there is more available money right??

Shouldn't the dollar be going up in value?

Supply and demand dictates that more of something means it's worth less. Scarcity creates demand.

a reply to: AugustusMasonicus

Right, so wouldn't that mean that the Fed is printing money?

originally posted by: toysforadults
Right, so wouldn't that mean that the Fed is printing money?

No, it means that people are shifting from DXY/currency to issues.

a reply to: AugustusMasonicus

DXY/currency to issues.

Oh nvm.

They are divesting from the index for currency.

a reply to: toysforadults

DXY is the spot dollar symbol.

a reply to: toysforadults


According to the chart, the value of the dollar was almost the same at this time last year.

92.8 now
94.0 then 8-1-16


93.1 on 8-3-15

Seems almost too normal