The U.S. Dollar: The World’s Primary Currency, Today and Tomorrow

We’ve seen some real wild swings in the dollar recently. That is largely because the ‘safe haven’ trade is coming off around the world. Currency speculators are selling the dollars they bought when it looked like Armageddon was upon us and buying something that may have a better outlook. Also, there is this huge wave of bonds that have to be sold by the Treasury and they will swamp the market. Then the US is likely to enjoy a period of untoward inflation in coming years. So why would anyone be surprised if the dollar went down a bit. The issue is that the dollar has gone up a bit here lately. Part of that might be the dollar got oversold or some other currencies got over-bought or some other technical explanation (can you say Iranian elections?). Part of it could be that the scare that foreign central banks would stop holding dollars as their principle reserve currency isn’t going to pan out after all. Read more