Why USD is strong?

Fed funds rate is already 2.00%…one more rate cut max… but thts it. On the other hand, others have not even started yet… With commodities meltdown, the buzzword is deflation, not inflation. i think currency traders r expecting aggressive rate cuts by eurozone, uk. look at USD/JPY … touching 100.00 … JPY has appreciated significantly as opposed to every other currency which is falling against USD Carry trade is dead… Aussie down more than 10% against JPY in one single day …

its not the dollar rising - its the other currencies falling. the bad US economy had been priced into the dollar since a year ago. the bad EU and JP economies are being priced into EUR and JPY now.

I had been in the inflation and hyperinflation camp, but now I see a global contraction in money supply as market capitalization just goes POOF and people still have debts all over. Now I’m trying to sort out the competing pressures, and it ain’t pretty.

Don’t JP banks look fine now? So why the drop in JPY?

It’s because investors are selling high yield currencies (euro) and mocing away from risk. Selling oil and buying treasuries.

rohufish Wrote: ------------------------------------------------------- > its not the dollar rising - its the other > currencies falling. the bad US economy had been > priced into the dollar since a year ago. the bad > EU and JP economies are being priced into EUR and > JPY now. That… and maybe US money that is invested abroad coming back home?