Where will the US dollar be going?

windeguy

Platinum
Jul 10, 2004
42,211
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This was posted by ZC1 in the FOREX thread and should provide for an interesting discussion by those of us here who know everything there is to know while not knowing much at the same time:

Any economic intelligence on this site that can explain why is the dollar so high these daysand where it is expected to be at over the next year? Just got a rate of 45 today, July 30th 2015. It is a double edge sword in that I like the extra pesos in my pocket today but know that prices will soon follow.

Yes, the dollar is strong and has been for some time. When will it not be strong? Some fortune tellers say soon.
You are correct in fearing that an increasing value for the dollar will cause peso prices to rise. And if the dollar falls, those prices will remain where they were in a ratchet effect of prices ever going upwards for most items.
 

Criss Colon

Platinum
Jan 2, 2002
21,843
191
0
38
yahoomail.com
You can answer your questions all by yourself!!!!!!!!
Over the last 20 years, has the Dominican peso gotten "stronger", or "Weaker" against the US dollar???????
Would you rather have $1,000 dollars in you pocket, or 45,000 pesos.
Would you prefer a "Fixed Income" for the next 10 years of your life in "Dollars", or "Pesos"?????

The US Dollar is the "World's Currency" for a good reason!!!!

ONE good thing about being "OLD", and "STILL" having a good memory, is that I have heard, "The US dollar will soon be worthless, The "Euro" or te Chinese "Yuan"?????, will be replacing the dollar as the favored currency"!!!
A MILLION TIMES!!!!

And I am STILL VERY HAPPY I get my pensions in US DOLLARS!!!!

Could be WORSE, the "Bolivar" has devalued 600 plus % "SO FAR" this year!!!!

CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
 

caribmike

Gold
Jul 9, 2009
6,808
202
63
This was posted by ZC1 in the FOREX thread and should provide for an interesting discussion by those of us here who know everything there is to know while not knowing much at the same time:

Any economic intelligence on this site that can explain why is the dollar so high these daysand where it is expected to be at over the next year? Just got a rate of 45 today, July 30th 2015. It is a double edge sword in that I like the extra pesos in my pocket today but know that prices will soon follow.

Yes, the dollar is strong and has been for some time. When will it not be strong? Some fortune tellers say soon.
You are correct in fearing that an increasing value for the dollar will cause peso prices to rise. And if the dollar falls, those prices will remain where they were in a ratchet effect of prices ever going upwards for most items.

Can you link to the FOREX thread please?
 

zoomzx11

Gold
Jan 21, 2006
8,367
842
113
Is there some reason to suspect it will stop doing what it has been doing for a long time? I fail to understand why the DR does not just dump the peso and go on the dollar. It would keep me from having to constantly compute the new peso rate all the time as the dollar rises against the peso.
I would like that.
 

PanfilodeVaca

New member
Jan 12, 2014
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Is there some reason to suspect it will stop doing what it has been doing for a long time? I fail to understand why the DR does not just dump the peso and go on the dollar. It would keep me from having to constantly compute the new peso rate all the time as the dollar rises against the peso.
I would like that.

If they went to the dollar, they couldn't print their own money.
 
Jan 9, 2004
10,898
2,225
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Is there some reason to suspect it will stop doing what it has been doing for a long time? I fail to understand why the DR does not just dump the peso and go on the dollar. It would keep me from having to constantly compute the new peso rate all the time as the dollar rises against the peso.
I would like that.


While there are multiple reasons countries do not dollarize....the two main reasons are both political;

1, Pride of having ones own currency; and
2. Being able to print more at a moments notice....and thus strengthen/weaken exports/imports/tourism, etc....as pointed out above by Panfilodevaca.

PS. Barring a financial meltdown in the US...the dollar gets stronger against most currencies ....especially if the Fed raises interest rates in September or December.

Respectfully,
Playacaribe2
 

harry2010

New member
Apr 27, 2010
235
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Euro, I never thought of it As real money. it is strange that a couple guys get together create a new currency and force it down the throat of everybody. How do they decide what that currency is worth? based on what?
 

ZC1

Member
Dec 8, 2013
179
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18
Thank you. I thought perhaps the rise of the dollar was perhaps due in part to the increase in the use of credit cards in the DR. As more and more imported products are being purchased on credit, dollars are needed now to pay for these larger inventories of goods, thus a shortage in dollars, hence a higher rate. If my theory is true and Dominicans continue to migrate to a buy now/pay later credit economy things could get worse. When the mass population can't afford their rice and beans an idiot politician usully appears as a savior and the country takes a big step back. I love it here (some days) but at a cross-road of investing further here or heading back to the chaotic homeland in the USA. Hoping a DR forum reader with an economic backround had insight.
 

windeguy

Platinum
Jul 10, 2004
42,211
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ZC1 you actually have a point. Not credit cards as such, but government payments that normally need to be done in dollars are one reason the dollar continues to rise.
 
Jan 9, 2004
10,898
2,225
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ZC1 you actually have a point. Not credit cards as such, but government payments that normally need to be done in dollars are one reason the dollar continues to rise.

Yes he does have a point. Expansions of credit because of lowered interest rates (central bank has lowered the rate twice in 2015) has increased borrowing/spending and helps drive the economic growth rate.

However, cheap money without sustainable growth can lead to inflation and secondarily when one country tightens credit and another maintains the status quo or loosens credit (DR in 2015) the end result starts to show up in the exchange rate.

A prime example is the Euro/USD. The ECB has begun a huge stimulus of the Eurozone by lowering rates and providing cheap money to help thwart the stagnation in much of the EU. The net effect has taken the Euro from 138+/- down to 109 against the dollar. Shorting the Euro has been largely a winning trade for at least a year now.

And while you cannot short the DR peso you can and should keep most of your funds in something other than pesos.....and hopefully not bitcoin or gold.


Respectfully,
Playacaribe2
 

Contango

Banned
Dec 27, 2010
2,196
5
0
possibly in SEPT, fed will raise interest rates .25%.. The Green Back will stay strong all through 16.
in 2011 I was lucky enough to sell all my CAD ( most of it ) for USD.. Now I am a happy camper...
The CAD was worth 1.05 US at one time in 2011-12.... There is only one REAL CURRENCY in the WORLD the US$
Go d bless America... I also remember all those idiots claiming chino dollar and even the fu kin rubble as replacements. morons..
The best part thing about BENJAMINS is greasing them with oil and sticking them to your naked body in the bathtub and realizing you have the Worlds most respected currency para siempre.
(Joke about greasing the Benjamin's up)... God Bless raking over the simple dessert little guy.
 
Last edited:
Jan 9, 2004
10,898
2,225
113
possibly in SEPT, fed will raise interest rates .25%.. The Green Back will stay strong all through 16.
in 2011 I was lucky enough to sell all my CAD ( most of it ) for USD.. Now I am a happy camper...
The CAD was worth 1.05 US at one time in 2011-12.... There is only one REAL CURRENCY in the WORLD the US$
Go d bless America... I also remember all those idiots claiming chino dollar and even the fu kin rubble as replacements. morons..
The best part thing about BENJAMINS is greasing them with oil and sticking them to your naked body in the bathtub and realizing you have the Worlds most respected currency para siempre.
(Joke about greasing the Benjamin's up)... God Bless raking over the simple dessert little guy.

The Canadian and Australian currencies are largely commodity driven. When commodity prices are down (like now) so goes the currency. It certainly will not help if the US raises rates this year.

And while an interest rate rise in the US will definitely affect the peso....I do not see it jumping more than a couple more pesos to the dollar (short term)....but note that other economic circumstances could soon come into play here (egregious borrowing/spending during the Presidential election cycle in 2016).


Respectfully,
Playacaribe2
 

sosuamatt

Bronze
Jul 29, 2013
912
13
38
When the Fed raises rates other currencies will fall as international banks get the higher interest rates and use greenbacks to do so. The downside to this for people living in the states is that it makes cheaper imports compete with homegrown goods and hurts manufacturing. A plus for Americans is their travel dollar gives them more affordable vacation outside of the country which in turn can hurt the local tourist economy.
 

windeguy

Platinum
Jul 10, 2004
42,211
5,966
113
The Euro started at parity with the USD did it not? Went up in value and is just returning home to roost after some failed social experiments.

The Canadian dollar is also a big loser as of late at 77 Cents on the USD (well it is called the Loonie) - good explanation on the commodity connection to $ Canadian.