Contrary Dollar View

Here is a contrary view on the dollar, probably only for short-term traders.

Submitted by Nic Lenoir of ICAP

Despite continued discussions about fundamental USD weakness, and the fine job the government is doing devaluating our currency, I can’t help but seeing reasons to buy the USD.

My view does not rely on contradicting the thinking according to which excess liquidity and unbalanced budgets for the government and the consumer lead to weaker currency. But I think that the amount of currency being “retired” with debt not being rolled and the velocity being null is partly countering the excessive printing. Also, one need also to keep in mind that when it comes to currencies all is relative, and while the Fed and the Treasury department are certainly not acting with a strong USD in mind these days, other countries have embarked on a similar path. Last but certainly not least, almost everybody is short USD.

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