Kumacho wrote: ↑
Fri Dec 01, 2017 3:44 pm
So maybe one of you Trump supporters can answer this...if Trump and the republicans are so good for the american economy why has the dollar been on a downward trend since January?
Again, I'm neither republicuck nor democuck. But when you look at the dollar during the last 10 years.
I'm not a big Trump fan, but I believe that I can explain.
1) The dollar was experiencing an unusual increase as the U.S. recovered faster from the recession than the rest of the world. Now, that is over. As the Euro rises, the value of the dollar per the exchange rate decreases, and similarly, countries outside of Europe are reaching the point of recovery, which effects the value of the dollar as well.
2) Trump is actually letting the dollar fall slightly on the exchange because it will mean more trade productivity. That's not to say that letting the dollar crash would be good but that allowing the Euro to grow a bit stronger will be.
Many investors helped boost the value of the dollar shortly before Trump's election, but that was on the supposition that he would grow our domestic product by means of tax cuts instead. As it slowly becomes clear that he is not accomplishing that, those same investors are causing a reversal of the effect.
3) Treasury bills are increasing in yield, which directly effects the strength of the dollar.
According to the New York Times,
"It is important to put the recent decline into a broader context. Over the last six years, the dollar is still up about 28 percent."
Ultimately, the consequences would fall on the consumer who ends up paying a bit more for everything. That is an issue that the GOP thinks they can resolve by giving businesses the cuts they wanted.