THE DOLLAR SLIDE

The euro’s value topped $1.20 on 1 September, its highest value since May 2018, and the British pound reached $1.345, its highest value against the dollar this year, as the dollar lost as much as 0.4 percent against six major currencies.

Today, the dollar moved up and euro fetched just under $1.18. The stronger dollar pushed gold prices down to close at $1,954.

China’s renminbi also climbed the dollar to 6.81 per greenback, the renminbi’s highest value in more than a year.

As we keep emphasizing, while the dollar is having a bounce back, it will keep losing its allure now that the Federal Reserve has indicated it will keep interest rates near zero for the foreseeable future, thus eroding the dollar’s yield advantage.

And with our forecast for the Fed to move into negative interest rate territory, the dollar will fall lower.

What will push the greenback higher? A wild card event such as war or unforeseen catastrophes that hit Europe or China.