The U.S. economy is expected to flourish in 2018, and the stock market hinted at that as the new year starts. On the other hand, the U.S. Dollar itself has a much worse forecast for the upcoming year. President Trump’s new tax reform will be beneficial for American businesses and may even spark the USD a little bit, but the truth is, the rest of the world is moving forward, while the United States is slacking in the currency department. As commodity spaces continue to rally and the USD keeps falling, growing investors are beginning to crave riskier assets such as equities.
Even if the U.S. economy begins to flourish beyond expectations and the USD benefits from the Republican tax reform, it would be extremely difficult to sustain. Similar currencies from New Zealand, Australia, and Canada continue to thrive, but the USD has not followed suit. The more those currencies, as well as other relevant currencies, continue to succeed, the worse the USD is expected to perform. A thriving international economy is a wonderful thing, except for forex traders betting on slowly progressing currencies.
Bet Against The USD
To be honest, it’s going to be a safe bet to assume that other currencies are going to perform significantly better than the U.S. Dollar. Between recently released bond yields and upcoming manufacturing performance indexes, the dollar has seen little movement. Similar to what was mentioned above, the lack of movement may be encouraging to forex beginners, but experts would say that no movement is possibly the worst thing that could happen to a currency. As the old saying goes, “if you’re not moving forward, then you’re falling behind.” Moral of the story, keep an eye on your forex investments. Things could move at a slow pace if you’re betting on the dollar.