The American Dollar, is it still safe?

It is quite acknowledged already that then things begin to go bad, and the global economy is down, when trouble is all around and anxiety increases dramatically, those who deal money, but not only them, start thinking about a particular currency, that is the American dollar.

In the context of strong international turbulence, as the American leader Donald Trump launched furious threats on North Korea,  if it continued to menace the United States, global investors sold the dollar. The same phenomena happened in June, as Saudi Arabia and other Arab nations imposed an embargo on Qatar, followed by a serious crisis to the Persian Gulf- an area of intense interest, because of its oil-rich soil. . But the American currency was even more affected in July, after the Russian President Vladimir V. Putin expelled 755 American diplomats which increased even more the level of tension between the two nuclear powers.

In a fact that the dollar remains the main instrument for global trade and it is  highly probable it is going to stay like that for quite sometime. Yet those who work in the field of currency trading begin to realize that  the dollar may be losing some status on the markets, as they struggle to deal with the uncommon measures taken  by the leader of the nation.

 

Taken into account that president Trump is such an unpredictable character and his presidency has been so full of unexpected reactions so far from what national as well as international norm predicts, it is understandable why existing plans had to be readjusted. Furthermore,  the dollar became subject to additional skepticism, making it slip even lower. Some even began worrying about the real strength of the American currency, while others in Europe and Asia built fortunes.

The dollar has in a way become an international medium of expression for the American political environment “At the margin, investors may be a little more cautious in treating the dollar as safe haven,” said Jeremy Cook, chief economist at World First, a London-based company that deals with foreign exchange transactions. “Certainly, the sentiment toward the viability of the Trump administration has not helped. There’s the risk that at 3 a.m., Trump tweets something and the dollar gets hit.”

Even before Donald Trump became president, many investors were buying into the so-called Trump trade, a bet that the new president’s economic plans and measures – like tax cuts and heavy infrastructure spending-   would spur economic growth. This formula worked wonders on the stock market. Also, during the Trump administration, American shares have reached new highs, which is indeed a gratifying thing. We can only hope and pray for a good outcome.

 

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