With greater “macro factors” affecting the U.S Dollar, it becomes increasingly more difficult day to day to project it’s movement, or at least via the usual correlations.
A Petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country
Trade agreement put in place world wide “circumventing exchange in USD” being the largest over riding factor with China now trading with the Brits, Russians, Swiss, Australians, Mexicans, And even the European Union – outside the use of American Dollars.
I believe the list of countries now trading with China “outside the use of USD” is now upward of 23 – 25 deep. For the life of me I can’t locate the list on the Internet.
If you can even fathom the loss of revenue to the United States when you consider that “previously” every single transaction between these countries “included” use and exchange of U.S Dollars – the picture begins to take shape.
A tremendous loss, and most certainly not a popular news story on American television, being completely outside the usual day-to-day facade/sham of the “recovering” U.S economy.
I guess if you ran a business of your own, it would be kind of like telling your staff “everything is fine” there at your physical location – having just found out you’ve lost your top 25 wholesale accounts. Keep smiling, and keep your local clients happy as…..they don’t really need to know “about that”. Until of course the “going out of business sign” is hanging in the window.
I imagine by the time we catch wind of “more and more oil trade occurring via the Middle East” and that trade being “outside the U.S Dollar” we’ll also be hearing of the next war the U.S will be instigating in order to squash the deal, with the sole intention of saving the “petrodollar”.
I’m getting smoked on my first few entries ( again a touch early ) long USD as markets are doing all they can to “take in the money”. The US Dollar has “swung low” and along with that has also been volatile / taking out trades. I remain long USD and will just be looking to add on any further weakness moving into the Fed meeting announcement tomorrow afternoon. In this case “please don’t prove me right” and “pull the tapering just yet” ( before it’s even begun ) or I’ll dump these trades in a heartbeat.