Forex Trading | Currency Exchange | Currency Trading | Foreign Exchange Blog » Opinion http://www.forexbite.com/bites Wed, 20 Apr 2011 04:26:46 +0000 en hourly 1 http://wordpress.org/?v=3.1.1 Why the US Dollar Has Not Crashed? http://www.forexbite.com/bites/why-the-us-dollar-has-not-crashed http://www.forexbite.com/bites/why-the-us-dollar-has-not-crashed#comments Sat, 04 Dec 2010 22:06:47 +0000 http://forexbite.com/bites/?p=31 Why the US Dollar Has Not Crashed? post from Forex Trading Blog

]]> Considering the budgetary deficit and the trade deficit that US is facing the US dollar should have crashed. This was the projection by many analysts. But, would it?

China, the factory of the world runs huge trade surplus with US. What does China do with all the US dollar that it earns? They are investing in US dollar. When they keep buying US dollar, the US dollar maintains its strength because of demand and supply. A strong dollar makes Chinese products cheaper to US consumers and that is why the US market is flooded with Chinese products. Chinese have invested in technology that has enabled it to produce quality products and US consumers have no complaints.

US and China have developed such a synergy between them in trade that Us needs China to stay alive and China needs US to buy what they produce. If one pulls the rug both would crash. The chances are remote.

US dollar is here to stay. Not to worry.

Why the US Dollar Has Not Crashed? post from Forex Trading Blog

]]> http://www.forexbite.com/bites/why-the-us-dollar-has-not-crashed/feed 0 Chinese Economy Flexing Its Muscles http://www.forexbite.com/bites/chinese-economy-flexing-its-muscles http://www.forexbite.com/bites/chinese-economy-flexing-its-muscles#comments Sat, 04 Dec 2010 21:59:45 +0000 http://forexbite.com/bites/?p=15 Chinese Economy Flexing Its Muscles post from Forex Trading Blog

]]> Financial firms lead by those in Hong Kong have over subscribed for the second yuan bond issued in Hong Kong. The $750 million (5 billion yuan) was 10 times over-subscribed. The strong demand is driven by expectations of a further appreciation in the Chinese currency.

A strengthening Chinese economy will increase trade volumes with key partners (especially Australia and Brazil). The AUD is likely to strengthen further against the USD over time, especially with the Australian interest rate being where it is.

Chinese Economy Flexing Its Muscles post from Forex Trading Blog

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