- USD/KRW for a brief period of Backslid less than 1400.00 on Wednesday, where Korean won a tender.
- Details remain high, but the participation of US representatives has been reported directly in foreign exchange market discussions with Korea.
- The Koreans, which decreased against Greenback decades ago, can be set to purchase recovery.
The US dollar/KRW was below on Wednesday, and decreased by 2.3 % of peak to hot the next day, after rumors that representatives from both the United States (the United States) and South Korea talked directly about foreign currency markets on May 5. Attending the annual meeting of the Asian Development Bank in Milan.
The US dollar is on a structural path towards deliberate weakness?
White House representatives strongly opposed the hint that the United States is following a strategy that is going on the dollar as part of the “renewal” of comprehensive American trade policies. However, US President Donald Trump was completely open to his desire to weaken US dollar To reduce the trade deficit and make us more competitive, even if it is at the expense of the American services sector. In the last toll, the activity of very profitable services accounted for approximately 80 % of the American economy.
The Korean victory was a steady decrease against Greenback for more than a decade, but the dollar seizure strategies from the United States can put the victory, as well as other reduced currencies, at a strong and long -term change. Goldman Sachs also noticed, the main headlines such as SK-Us FX “focus on the scale of surplus surplus currencies in the estimated trade in a weaker environment in dollars.”
US dollar price expectations/KRW
Although 2.3 % cling to top to the bottom on Wednesday, the US dollar/KRW regained some land inside the day, raising the negative side of the husband to one percent more. The couple is still trading in congestion near the period in the south of the 200 -day SIA moving average (EMA) near 1,415.00. However, changing the sea driven by basic shifts can see a sustainable decrease to less than 1,360.00.
USD/KRW Daily Chart
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. The Federal Reserve Printing includes more than dollars and their use to buy US government bonds mostly than financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
