Today is Sat, September 23, 2017 0:23:24 GMT
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Contributors Entering the Next Phase of the Dollar’s Demise

The Federal Reserve is diluting the purchasing power of our dollars yet again! It’s holding interest rates unusually low and continuing to print money.

Anytime there is more of something, it becomes worth less. And, rest assured, there is an abundance of dollars out there. The Fed continues to print, print and print.

But don’t take my word for it that the greenback is heading for the dustbin: check out what the buck has done over the last 10 years.

The Next Leg of the Downtrend Has Begun

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The U.S. Dollar Index weighs the dollar against a basket of six major currencies, and as you can see from the chart above, the greenback has gone from the upper left of the chart down to the lower right. That’s the simplest definition of a downtrend that I know of.

However, I’ve emphasized the latest part of the downtrend’s channel in red. You’ll note that the buck rallied a bit over the last year and a half, but that was in the context of the larger downtrend.

You’ll also note from the black line above that the upward bounce within that overall downtrend has now come to an end. The dollar has broken through the bottom side of the black trend line.

This shows that both the near-term and long-term trends for the dollar are now downward yet again!

Now, we could get some temporary recoil higher over the coming days to weeks … but as you can see from the gray arrow in the chart, I fully expect the buck to go back to the bottom of its channel, which will put it near its all-time low around 70.

Have a nice day!

Sean Hyman
Editor, Currency Cross Trader

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