Monday, December 1, 2014

US Dollar looking good both short and long term


The forces pushing up the dollar are likely to persist in the short run. Among them are deliberate devaluations of the euro and yen, weakness in commodity-driven currencies, slower growth in China, the carry trade, the dollar’s safe-haven appeal and developing-economy woes.  

The greenback is also likely to remain strong in the long run. To put it into perspective, the dollar reached a peak against major currencies in 1985, then slid 52 percentage points over the next 25 years. It's been rising since August 2011, yet has recovered only 8 percentage points of that 52-point slide. 

Of course, there’s no assurance that the dollar will regain its 1985 peak, yet there are concrete reasons to expect it to remain strong over the long haul.