Has the Greenback Peaked?
…It Depends on Who You Ask!
In the last couple of weeks, it is amazing just how varied the economic headlines have been when it comes to the U.S. dollar and the direction it is headed. In fact, “maddening,” may be a better way to describe what these headlines have been blaring! Below are just a few banners that were released over the exact same week;
- “The Correction in the U.S. Dollar Remains Intact.”
- “The U.S. Dollar Train has Further to Steam.”
- “Looming Trade War May Dampen U.S. Dollar Rally.”
- “Has the U.S. Dollar Peaked?”
- “Gold Rallies on Renewed Investor Demand Weakens U.S. Dollar!
- “Here’s why the U.S. Dollar Could Soar by Another 30%.”
- “Dollar Plummets, Stocks Mixed on Dull Job Data and Looming Policy Uncertainties.”
Further research indicates that almost half of the headlines for financial articles written in the last couple of weeks when addressing the status of the Greenback are at odds with each other. However, that is only half of the story. Another couple of interesting facts surrounding these financial snippets are:
- The headline only reflects the main points of the article about 58% of the time, when the subject is the valuation of U.S. currency.
- At the time of the articles publication date, the actual value of the U.S. Dollar reflected in the currency market was different almost 50% of the time.
How can we explain these variances in both U.S. dollar value and the subject matter covered in these articles? Well, some of it can be explained simply by considering the volatility associated with currency exchange rates and investment markets. As an example, a currency rate that is trading from a position of strength against the U.S. dollar in the morning, can tumble dramatically due to an obviously unexpected natural disaster (such as an earthquake) in the afternoon.
As to why a headline may literally scream about a dramatic shift in currency value only to water-down that bold pronouncement in the body of the article…leaves one to wonder if the author of the article may be trying too hard to anchor a reader’s attention. Making one wonder if the “…devil is n the details!”
Don’t Panic…until you check yourself!
When you are scanning articles or news headlines through your mediums of choice, remember that headlines are designed to capture the reader’s attention and then peak their interest in reading a bit further into the article. Which begs the question, how should you interpret such an article heading?
If you are reading an article found on a newspaper page (or most short-segment blogs) the main facts of the article should be contained in the first few paragraphs. As you delve deeper into the article “background,” information surrounding the articles subject should begin to surface.
However, if you are reading an article written for a technical journal, on-line magazine or subscription type service, the author’s expectation is that his or her readers will require more information and are therefore more willing to be exposed to more intimate or detailed information to gather the subtleties or nuances of the story.
This means you can expect the background information to be posted nearer the front of the article and for the main aspects (and details) of the article to be delivered in a more intuitive fashion throughout the body of the article.
So…Where is the U.S. Dollar Headed?
Having reviewed about a dozen different currency indicators and currency investment groups data…it appears the general consensus is that for at least the near future the almighty Greenback will remain stable and strong. This means that for the foreseeable future, we can expect it to not slip much (if at all) off of its near historic highs achieved over the last six weeks or so. Short of an overseen calamity, the Greenback is standing TALL.
However, to be sure where the U.S. dollar is at any given time, you have to have a currency exchange partner you can trust and count on to provide you up to the minute currency variances. Which is exactly why you are no doubt already familiar with Mosaica FX!