>> Fiat Currencies in motion
Major governments have been printing money over the last few months. Lets take a peek into what this is doing to the major currencies.
(I) British Pound
FXB (CurrencyShares British Pound Sterling Trust ETF) has fallen dramatically in the last few months, here is the all-revealing chart-
(II) Japanese Yen
FXY(CurrencyShares Japanese Yen Trust ETF), meanwhile, has been on a
(III) US Dollar
(I) British Pound
FXB (CurrencyShares British Pound Sterling Trust ETF) has fallen dramatically in the last few months, here is the all-revealing chart-
(II) Japanese Yen
FXY(CurrencyShares Japanese Yen Trust ETF), meanwhile, has been on a
(III) US Dollar
Both the UUP(PowerShares DB US Dollar Index Bullish Fund) as well as UDN(PowerShares DB US Dollar Index Bearish Fund) are at an interesting juncture.
It wouldnt be fair not to look at the $USD chart :) -
There has been a flight to the dollar despite the "weak fundamentals", however this may continue for longer than one thinks. It would be prudent to keep an eye on these charts to keep on top of an impending change in trend, short-term or long-term.
Finally, the picture is more interesting when looking at what gold does in conjunction with the USD. Take a peek into that is an older blog post : >> Gold Makes a Move - Short Term Trade?
Labels: Currency, Gold, Historical Posts, US Dollar
posted by KaranZ at 5:05 PM
2 Comments:
Hi,
Doesn't printing money mean increase in inflation and fiscal deficit increase ??
Cheers,
Saket
Defining in purely monetary terms, an increase in money supply leads to inflation.
The growth of money supply has increased at a staggering pace (yet another blog post coming-up :) ). However businesses and consumers are hoarding cash due to the uncertainty - so we are not seeing the effects of the increase of money yet.
This can quickly change due to a loss of confidence in banks or loss of confidence in a currency.
Hyperinflation is a definite possibility, however it would be prudent to look at what lessons history has to offer - Japan being a good example. An excellent article on the same is @ http://www.marketoracle.co.uk/Article8541.html
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