US Dollar Strengthens


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America’s money is back in the game. The US dollar has reached its highest value – the last of which was in early May. The Feds have been dropping hints that the economy may even be better in the coming months where there could be an increase in interest rate this coming December. Similarly, Wall Street is predicting that there will likely be a 64% chance that the Fed rate hike will push through – this is by far the highest rate compared to the previous months. If the expectations would reflect what is really happening in the market, then this would be the first time for US this year which means that it’s now on its way to finally having a very healthy economy. What are its possible implications?

People on the other hand have opposing views on the how to accept the dollar rate increase. For vacationers, it’s actually a good sign – the dollar currency can buy them more goods when they are abroad. But for those who are selling their products overseas, it could spell bad news – there’s likelihood that buyers abroad would perceive the current exchange as expensive and these may opt to buy from somewhere else instead.

Since the government may be inclined to protect businesses that have investments abroad, it is now being rumored that the dollar rate hike may not push through as planned. There’s a great chance that a rate hike could affect the US manufacturers and exporters which can also be disastrous for the country.

Meanwhile, there are those who are asking if the stronger dollar may have something to do with the incoming elections. Economists are still uncertain if this is connected to Hillary Clinton’s improving odds. If it does, then it’s only an indication that majority of the investors would like to see her as the next president of the country.