DTT Buzz

The US Dollar has been crushed over the last year against almost every currency. Is the USD sell off over? Some people say that the USD is stabilizing because, "the dollar may have reached a level that is low enough to start equalizing the terms of trade." The terms of trade are defined as "the price at which a country sells its exports and the prices paid for its imports"

For the terms of trade in the USA to really start to stabilize exports in the USA will have to continue rising or imports continue to fall. How is that going to happen very quick? If the USA was a vehicle it would be an oil tanker; oil tankers don't stop very quick. Although this might be a short term bottom in the USD, I think the USD is going to see another downturn near the end of the year, possibly associated with the election of a Democratic President. The Democrats these days keep talking about protectionism and capital gains increases. How can protectionism or a higher tax on investment help the USD or American capital markets?

Best Regards

Keith Greff Jr
Trade Analyst