Tuesday, August 25, 2015

I don't know what it means yet.


I remain convinced the Fed will raise. If they were not going to raise, they could have projected that a long time ago and the dollar wouldn't have caused so much carnage across the world. Oil is bought in dollars. When our dollar is strong - it puts a lot of pressure on other economies. Ironically putting more upward pressure on the dollar.

When China started throwing everything but the kitchen sink at their problems, obviously the presumed outcome is that the dollar will strengthen. It's the whole reason China is devaluing their dollar after all.

So I was a little surprised when I looked at the dollar chart this morning. I've only been paying attention to every gyration from the dollar for about 6 months because of the whole oil thing. It was trading in the 97.48 range when I first started watching. Now it's in the 94.44 range. A few cents might not seem like a lot, but normally the dollar doesn't fluctuate that much.

I find the whole situation ironic because now all the traders are freaking out. Not only do they think there will be no rate hike, but they are screaming for the Fed to restart the printing presses because all of a sudden "the dollar is killing us"! A little late to the party I'd say.

Presumably the reason to print is to devalue the dollar.  But something in the market is already on the job.

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