MARKET HINTS AT COMING USD INSTABILITY

The recent US Dollar slide has been accompanied by questions of whether the trend will continue to the downside for the largest currency or not. This article sheds light on the developments in the FIAT sector and how this affects crypto stable coin alternatives like USDT.

Indeed, US Dollar and USDT purchasing power has been degraded over recent weeks. The dollar has fallen by more than 5%. We have been reiterating for a long time that the purchasing power of FIAT currencies fluctuates by 10%, 15% or more per annum. Because of this traditional currencies are speculative instruments, especially in the medium term and, of course, in the long run.

 

JUMP IN THE VALUE OF X8CURRENCY PORTFOLIO

On the other hand, X8currency portfolio benefited from the fall in the dollar. During this very move the value of the basket of currencies increased by 0,4%! This is all due to the fact that the aggregate basket moved closer to the overall foreign exchange market price equilibrium. Relative appreciation of other currencies against the dollar more than made up for depreciation in the USD.

 

It is another example of how X8currency uses the market environment and converts the opportunities it offers into real tangible benefits. This one of the differences between X8currency and Tether USDT for example. USDT remains predominately dependent upon risks of individual currency. To the contrary, X8currency protects investors from this risk uniquely like no other currency or cryptocurrency does and it focuses on market scenario independence. These results confirmed this again.

 

WHAT’S NEXT FOR THE USD?

Interestingly, market price theory suggests that the longer a currency stays in a highly defined range, the larger the probability is for the price of the US currency to accelerate out from the price range. In this case we only need to take a look at how the dollar has fared against the euro during the last 18 months for example.

In fact, it has been in a very well defined range – hinting at larger future changes in the price. Currently USD is trading near the very centre of this price range, which is already quite mature. According to market theory this current situation could be just a beginning of a more prolonged USD trend waiting for the market behind the corner.

And it is not just this; politically market players are putting out hints about where the US currency might go as well. Trump wants to see a weaker dollar. In the meantime the banks are warning about a drain in bank deposits. The sentiment around USD is turning negative.

 

FIAT PRICE RISK INCREASES

All of the above stresses the point that not much has actually happened to the market for quite some time and if this will change, investors need to be prepared. The trigger for the slide in the USD was a warning by JP Morgan and the rest followed.

Furthermore, it appears current interest rates already reflect the expectations for a tighter future monetary policy. Through the remainder of 2017 and 2018 interest rates are not to increase much further according to United States Fed Funds Rate Forecasts data. Obviously, the market is figuring out whether there is any fuel left in rates movements to provide support for the US dollar.

 

SUMMARY

The combination of these factors stresses the need for a trully stable, highly liquid and secure currency. Savers should not fear such an environment and investors should not constantly contemplate if the currency, in which they keep their money, is still the right one for the next day.

X8currency answers this very need as it provides the highest level of safety and liquidity, so its users can detach themselves from fear and market scenario dependence.

Gregor

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