The US Fed members are going to discuss financial support the central banks of some countries this week. In the current situation it means pushing billions of dollars to the other countries economies.
The gold and bitcoin begun growed after the news. The rate of bitcoin has added 9.4% for the last week and gold 0.8%. USD has fallen 9.3% against the basket of its major trading partners’ currencies since the 19th of March and it is the lowest rate for the last 2 years.
A weak dollar exports deflation elsewhere. It helps US exporters be more competitive (albeit while harming importers in an economy with a structural trade deficit) and therefore one that imports more than it exports) while damaging the exports and growth prospects of economies elsewhere.
According to many financial analytics reports “the world is drowning into USD”. Federal Reserve not only emitted trillion of unsecured dollars but also wants to share it to the 14 central banks through liquidity swaps. So USD rate may have the strong falling in the nearest time, and the classic technical analysis confirms it.
The dollar’s fall by as much as 10.9% since its March high of 102.99 is creating a multi-year double-top — a bearish, M-shaped chart pattern containing two peaks and a trough, a technical analysis of the dollar index shows. The pattern will be confirmed if the index falls another 5%.
The most notorious double-top for the dollar came in 2001–2002, in the aftermath of the September 11, 2001 attacks on the United States, and was followed by a 33% fall in the currency through 2004. It then rallied for about 11 months before continuing its slide to record lows in 2008.