Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Anyone got a handle on why the USD is declining?
Old 08-03-2017, 08:27 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 3,953
Anyone got a handle on why the USD is declining?

I have noticed that the USD has dipped drastically recently against some of the major world currencies. Do we know why?

Euro, Pound and CAD are the main ones I watch.
__________________

__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-03-2017, 08:44 AM   #2
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
Quote:
Originally Posted by ShokWaveRider View Post
I have noticed that the USD has dipped drastically recently against some of the major world currencies. Do we know why?

Euro, Pound and CAD are the main ones I watch.
Probably because it was up for so long, it was time for a correction. I recent upped my international exposure, around the January timeframe.
__________________

__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 08-03-2017, 08:46 AM   #3
Full time employment: Posting here.
 
Join Date: Nov 2013
Posts: 573
Monetary policy in the EU and political gridlock in the US is my take on it.
NgineER is offline   Reply With Quote
Old 08-03-2017, 09:03 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 3,953
In particular the Canadian Dollar has gone from 1.40 to 1.25, that is a significant drop in the Dollar.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Old 08-03-2017, 09:06 AM   #5
Thinks s/he gets paid by the post
RetireAge50's Avatar
 
Join Date: Aug 2013
Posts: 1,348
The reason is because I will soon be going to Europe for a month.
RetireAge50 is offline   Reply With Quote
Old 08-03-2017, 09:23 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Quote:
Originally Posted by RetireAge50 View Post
The reason is because I will soon be going to Europe for a month.
USD is about 1.18 right now. When we lived there it was 1.25-1.3. Be happy.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 08-03-2017, 09:32 AM   #7
Thinks s/he gets paid by the post
Koogie's Avatar
 
Join Date: Nov 2007
Location: GTA
Posts: 1,401
Quote:
Originally Posted by ShokWaveRider View Post
In particular the Canadian Dollar has gone from 1.40 to 1.25, that is a significant drop in the Dollar.
The central bank here finally started raising interest rates again after not doing so since Julius Caesar was on the throne.

Not a lot of an increase but combined with market sentiment and outside influences it seems to have pushed it up quickly in a short period.
__________________
Family Motto: "Every penny's a prisoner"
Koogie is offline   Reply With Quote
Old 08-03-2017, 09:34 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 26,511
One time when we were in Europe, the euro was more than 1.4 USD. It was in 2007, if I recall correctly. It was tough, but life is short, and the wanderlust is strong.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 08-03-2017, 10:04 AM   #9
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 4,046
Short term fluctuations in FOREX are like short term fluctuations in the stock market. They attract many plausible explanations, none of which are verifiable.

In the long game, my opinion is that the dollar will decline.

It is held up right now because it is the world's reserve currency. That is not because it has much intrinsic merit (given our debt % of GDP) but because there are no real alternatives. The yuan is out because nobody trusts the Chinese. The ruble is out due to self-inflicted wounds. The Euro is out due to the Brexit turmoil and the economic problems of southern Europe. ... So the dollar's distinction is that it is the tallest midget.

Most of the rest of the world hates having the dollar as the reserve currency. One major reason is that our banking power can be and is used as a political tool to punish people we don't like.

A weaker dollar will create painful inflation as imports become more expensive but we will effectively be getting a discount on our debts by paying in cheaper dollars and our export products will become cheaper/more attractive overseas. Oh, and those of us with international investments will see our dollar net worth grow.

Will I live long enough to see this happen? I have no idea.
OldShooter is offline   Reply With Quote
Old 08-03-2017, 10:17 AM   #10
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 43,074
Quote:
Originally Posted by ShokWaveRider View Post
I have noticed that the USD has dipped drastically recently against some of the major world currencies. Do we know why?
Quote:
Originally Posted by Senator View Post
Probably because it was up for so long, it was time for a correction. I recent upped my international exposure, around the January timeframe.
+1
Quote:
Originally Posted by NW-Bound View Post
One time when we were in Europe, the euro was more than 1.4 USD. It was in 2007, if I recall correctly. It was tough, but life is short, and the wanderlust is strong.
+1
Exchange rates go up and down. It's a fact of life.

I remember quite clearly when you could get 360 yen to the dollar. That was quite some time ago, more than half a century. Now you can only get 110 yen for a dollar. And look at how much the yen has varied in comparison with the dollar, just in the past year! (graph below)

ShokWaveRider, perhaps all this is befuddling to you, and you are asking "OMG!! Why is that? How can that possibly be?" Answer? This is the way of the world, always has been. This is something with which most savvy international travelers are quite familiar. Exchange rates vary from time to time.
Attached Images
File Type: jpg Capture.JPG (40.1 KB, 43 views)
__________________
I have drunken deep of joy,
And I will taste no other wine tonight.

― Percy Bysshe Shelley
W2R is offline   Reply With Quote
Old 08-03-2017, 10:23 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by RetireAge50 View Post
The reason is because I will soon be going to Europe for a month.
Hahahah, we have similar luck
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 08-03-2017, 10:24 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
This is why I like the Lira, you always got 1000's per dollar, Seemed like a lot
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 08-03-2017, 10:58 AM   #13
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 14,071
I always come home from trips with a small stash of bills and coins. I like to have them so I don't have to worry about finding an ATM at the airport on my next trip.

YTD my "basket of currencies" has appreciated nearly 6% against the dollar. Some years it goes the other way, but it's not a big deal either way.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 08-03-2017, 11:17 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Feb 2013
Location: Toronto
Posts: 2,324
In Europe now and just be happy that you aren't paid in GBP and spending significant time on the mainland. The GBP has gone from 1.45 to 1.09 in under two years. The CAD went from 1.02 to just above 70 cents over 3 years before rebounding recently. I agree with the answer that the USD has probably been a bit overvalued and was due for a bit of a fall.
6miths is online now   Reply With Quote
Old 08-03-2017, 11:32 AM   #15
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 17,670
Quote:
Originally Posted by RetireAge50 View Post
The reason is because I will soon be going to Europe for a month.
Pretty sure we caused it during our trip the last ten days....
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Anyone got a handle on why the USD is declining?
Old 08-03-2017, 02:08 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Anyone got a handle on why the USD is declining?

Expansionary policy elsewhere plus higher growth rates expected elsewhere. Thats also why the major rotation from US to foreign equities is happening. I'm concerned the US may be looking a lot like japan stuck in a low growth rut if we can't figure out a way to spur productivity and wage growth.
dallas27 is offline   Reply With Quote
Old 08-03-2017, 02:58 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jul 2015
Location: Beaverton
Posts: 1,317
Quote:
Originally Posted by OldShooter View Post
Short term fluctuations in FOREX are like short term fluctuations in the stock market. They attract many plausible explanations, none of which are verifiable.

In the long game, my opinion is that the dollar will decline.

It is held up right now because it is the world's reserve currency. That is not because it has much intrinsic merit (given our debt % of GDP) but because there are no real alternatives. The yuan is out because nobody trusts the Chinese. The ruble is out due to self-inflicted wounds. The Euro is out due to the Brexit turmoil and the economic problems of southern Europe. ... So the dollar's distinction is that it is the tallest midget.

Most of the rest of the world hates having the dollar as the reserve currency. One major reason is that our banking power can be and is used as a political tool to punish people we don't like.

A weaker dollar will create painful inflation as imports become more expensive but we will effectively be getting a discount on our debts by paying in cheaper dollars and our export products will become cheaper/more attractive overseas. Oh, and those of us with international investments will see our dollar net worth grow.

Will I live long enough to see this happen? I have no idea.


+1

The dollar is crazy enough is a better option than anywhere else. When I started doing business in Canada the exchange rate was $.63. In 2011 it was par. It's tough to figure out how to make money when currencies fluctuate like that.

I think somehow we've forgotten that we are still $8 gazillion in debt but that seems to be ok.
__________________
Jump in, the water's warm.
Bir48die is offline   Reply With Quote
Old 08-03-2017, 03:04 PM   #18
gone traveling
 
Join Date: Oct 2016
Posts: 255
The dollar went way up with Trump's election and his promises to MAGA (as shown by the graph W2R posted), and now that the 'honeymoon' is over it's just settling a bit closer to its pre-election value.
Curmudgeon is offline   Reply With Quote
Trade Weighted US Dollar Index
Old 08-03-2017, 04:36 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 6,337
Trade Weighted US Dollar Index

Wondering how you see the US Dollar Index.
Simple explanation?

I confess to not understanding this, and wonder about the effect on the economy, if any, either long term or short term.

Thoughts? Links?

How do technology advances and advanced manufacturing processes affect this, particularly in comparison to less developed countries.
imoldernu is offline   Reply With Quote
Old 08-03-2017, 05:02 PM   #20
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: lumpen slums of cyberspace
Posts: 30,724
Quote:
Originally Posted by imoldernu View Post
Wondering how you see the US Dollar Index.
Simple explanation?

I confess to not understanding this, and wonder about the effect on the economy, if any, either long term or short term.

Thoughts? Links?

How do technology advances and advanced manufacturing processes affect this, particularly in comparison to less developed countries.
There's a discussion on the US$ underway, so the threads were merged.

Here's a chart from the St Louis Fed which shows the value of the US$ over 20 years. https://fred.stlouisfed.org/series/TWEXB

Edit to add - the US$ is still close to it's high over that 20 year period.
__________________

MichaelB is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Why haven't int'l mutual funds benefited from USD decline? soupcxan FIRE and Money 11 04-01-2008 10:33 PM
Why is the yield on my money market fund declining? soupcxan FIRE and Money 13 08-31-2007 06:40 AM
The Declining Dollar Erodes Personal Savings camberiu FIRE and Money 45 05-17-2006 08:05 AM
Declining COL in retirement?... Cb FIRE and Money 31 06-09-2005 02:47 PM
Why did you choose that handle? GTM Other topics 76 03-06-2005 02:14 PM

» Quick Links

 
All times are GMT -6. The time now is 11:56 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×