USD Strength: Is a Strong Currency Good or Bad?

FX news and analysis:

  • Politicians generally welcome a strong currency; economists say it can be either good or bad.
  • For traders, it’s the impact on other assets that really matters.

Check out the IG Client Sentiment data to help you trade profitably.

Importance of a strong currency

Politicians tend to welcome a strong currency and keep quiet when it falls, as though it were a vote of confidence in their abilities. For economists, it has both pros and cons. For traders, however, the key point when a currency surges or collapses is the likely impact on other assets.

To illustrate the political point, Donald Trump welcomed, on Twitter, the advance in the US Dollar from mid-February to mid-August 2018 – implying that it reflected well on his tenure as US President.

USD Strength: Is a Strong Currency Good or Bad?

Earlier, European Commission President Jean-Claude Juncker said in a lecture that “The future of the European Union is the future of the Euro, and the future of the Euro is the future of the European Union as a whole.” Philip Hammond, the UK Chancellor of the Exchequer, said the UK government

Article source: https://www.dailyfx.com/forex/fundamental/article/special_report/2018/10/19/USD-Strength-Is-a-Strong-Currency-Good-or-Bad.html