Dollar

What will be the trend of the dollar 10 July 2009 once again put the dollar in the center of the debate. The controversy surrounding his possible continuity towards the low in a medium-to long-term against major currencies, remains at the center of the debate. Meanwhile, the recovery of the appetite for risk has led him to weaken against the euro and to be located in the closing yesterday at $1,4025 per European currency unit. It will be convenient to bet against the dollar in the medium term? The risk-averse investors have experienced in the most tense moments of the international financial crisis has been without doubt the main ally of the American currency. This behavior of the global investor has been a clear signal that is still trusts the dollar as a strong currency. This situation of a dollar strengthening on a stage of profound crisis originated by the American financial system in an economy of terrible fiscal and external deficits in continuous growth that has been experienced during the past year, has represented a fact by others contradictory.

Not abounded logical explanations of why investors relied on that moment (and now also) in the currency of a country that was virtually on the brink of the precipice. Certainly does not seem a rational decision. The confidence that has been generated during decades the dollar, undoubtedly has been maintained in spite of everything, in this critical period. Perhaps it was also implicit wanting to avoid his downfall to not collapse next to it given the high exposure that the world has against the American currency. However, this trust has begun to weaken, and already have been observed the first betrayal, which recur more frequently and will continue increase making the dollar’s future increasingly uncertain. The dollar there is to look at it today from two perspectives: the short and the long term.