"Unexpected!"
Posted on 03/11/2015 8:17:48 PM PDT by tcrlaf
The currency war salvos just keep on coming. Moments ago the BOK unexpectedly (the move was predicted by just 2 of 17 economists polled by Bloomberg) cut its policy rate from 2.00% to a record low 1.75%, in what is clearly a full-blown retaliation against the collapse currency of its biggest export competitor, Japan, whose currency has cratered to a level that many in South Korea believe has become a direct subsidy for its competing exports. As such the only question is why the BOK didn't cut earlier.
The Korean Won reacted appropriately, if only in the first millisecond: then it seems the algos forgot what easing is, and the BOK may need to cut again shortly.
And following the surprise rate cut by Thailand earlier today, the "surprise" South Korean rate cut means there are now 24 easing policy actions by central banks in 2015 alone.
Oh, and if you dare to disagree, you are a racist that hates the idea of a Black President. Or Homophobic... Or sumpin'...
Meanwhile the dollar is soaring against most currencies, as the Fed is looking to raise rates.
“the dollar is soaring against most currencies, as the Fed is looking to raise rates.”
That can only continue for as long as we can take the pain of unaffordable exports.
US Steel plants are closing/laying off right now, because they can’t compete due to the strong dollar.
Clearly you have an understanding of economics. I dont. Can you explain why the US dollar is strong against the Canadian dollar right now? I don’t understand it.
Mostly currency flight.
We are paying interest, and the FED has been looking raise rates for some time.
Meanwhile, nations like Germany are charging YOU to hold YOUR money for you.
Loonie dives as U.S. dollar’s ‘violent’ strength roils http://www.theglobeandmail.com/report-on-business/top-business-stories/us-dollars-broad-and-violent-strength-roils-currency-markets/article23402789/currency markets
“Can you explain why the US dollar is strong against the Canadian dollar right now? “
US dollar is world currency. Euros are being dumped for dollars. QE4 is around the corner, as US companies squeeze the administration to do something about the strong dollar.
US companies that sell into euro are getting hammered.
At first glance, the strengthening dollar would seem to suggest we’re doing something right —the world is trusting the dollar more.
Alas:
It means world distrust of the dollar is simply less than world distrust of commonly traded non-dollar currencies.
It’s sorta like Ms. Dollar moping around as a fat chick BUT THEN she starts hanging out with Euro, and Yuan —morbidly obese chicks —fat Ms. Dollar suddenly seems a bit hotter, right?
Wait, I’m not finished:
And THEN instead of cruising for guys in the mall and gyms that heavy herd instead starts hanging out outside prisons and bases where guys just got out of basic training.
Compared to her friends, now Ms. Dollar is a SUPER MODEL..!!
See the point of my highly nuanced econ lecture?
If Europe and the rest of the non-American world snaps out of their money-printing addiction, that would sink the dollar.
A littly more clearly:
If they exercise less irresponsibility than the USA, then the dollar is sunk.
US dollar was stronger back in 2001 than it is today.
I thought that it was the latest bogus employment data that was threatening the rate raise.
LOL! Very clear and I can identify. My girlfriend and I went to a military dance years ago with her husband. Going home she told him we were the only good looking girls there. He said, “Yep, you girls were the queens of the heifer ball.”
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