Why Dollar Becoming Strong? 2018 USD Market Outlook
Last updated : 16 Aug 18
Why Dollar Becoming Strong? Key Reasons to Watch Dollar Market ! What makes U.S. Stabilize in Currency Market ?
World Currency Market Watch 2018
Trade War:
The China–United States trade war refers to the ongoing introduction of tariffs on goods traded between China and the United States.July 6, 2018, the United States imposed 25% tariffs on $34 billion worth of Chinese goods as part of U.S. President Donald Trump's new tariffs policy, Which leads 200 billion in Chinese products to be subject to a newly proposed 10% tariff, that led China to respond with similar sized tariffs on U.S. products.
Trade war Market Reaction:
Trade war fears had led to a bear market in China where by late June the total value of the country's stock markets was 20% lower than it had been at the beginning of 2018 when it reached record levels.
Crude Oil War:
Declining Demand, Iran Nuclear Deal, Oversupply of Crude Oil thus lead crude oil drops. The participating countries in OPEC Treaty Iran, Venezuela and Algeria have wanted to cut production to firm up prices. Saudi Arabia, the United Arab Emirates and other Gulf allies refuse to do so. Iraq sits alone as the only OPEC country to not only maintain supply but actually increase it. If OPEC does not cut production, the result is a further oversupply of oil, placing downward pressure on crude oil prices for the long term.
Nuclear War:
In early 2016 the U.S. and other major powers squeezed Iran’s economy to force it to guidelines the nuclear program. Most sanctions on Iran were lifted and mid - 2018 President Donald Trump, withdrew from the agreement and said it would re-impose and also U.S. forced other countries stop using Iran oil like India and many major countries stepped out of Iran oil imports and China said we won’t rise the additional oil from Iran will keep the existing contract.
Venezuela:
The economy of Venezuela is largely based on the petroleum sector and manufacturing.In 2014, total trade amounted to 48.1% of the country's GDP. Exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of those exports. Venezuela is the sixth largest member of OPEC by oil production because of last five years has been a steady decline in Crude price which leads decline in oil production and exports and a series of stern currency devaluations, disrupting the economy. In 2015, Venezuela had over 100% inflation—the highest in the world and the highest in the country's history at that time and also venezuela currency demonetization which leads failure for venezuela economy.
Turkish Lira :
The lira has reached a new low today (Friday) in its biggest fall in a single day since Turkey’s 2001 financial crisis. Donald Trump announced new higher tariffs for Turkey amidst the tensions. President Donald Trump said he had authorised higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminium and 50 percent one on steel.
Brexit Exit:
UK Prime Minister Theresa May increases preparations for 'no deal' Theresa May Steps up 'No Deal' Brexit Plans.Sterling has been under significant pressure over recent days as markets increasingly prepare for a 'no deal' Brexit, with a break of the crucial 1.11 zone in the Pound-to-Euro exchange rate being recorded in midweek trade; something that potentially leaves Sterling at risk of a sudden drop down to the 2017 lows at 1.0746.
USD Market Reaction:
Above Over the key points above USD favours to continue very strong. Dollar continues to rise up against all odds and play major key role in the market. Next 5 years dollar continue to build strong foundation and thus lead weaken currency will take decade to recap their economy.
