Earlier in the year I posted an article about the USD increase and the Oil prices decreasing, and how these two indicators are off to a bad year start. A couple of days ago as I was reading my daily morning news I came across this article “Increase in U.S. imports” The article did not only solidify my predication that I have listed, but it also proves that the USD is heading for a decrease soon if and only if Ceteris Paribus [everything stayed the same]. Simple economics are being applied and that as the USD is getting stronger everything else “imports” are getting significantly cheaper, this will cause the country to deal with:
- Increase in local production.
- Decrease on the USD currency = Depreciation of the USD [lower USD]
- Oil price would pick up a little.
This would happen in the long run [on the course of couple of months] if we live in an ideal world. However, other economical and specially political factors plays a huge role in the currency war. So where would the USD head next?!