We are about to witness another war. This time around, U.S. dollar against Euro and Oil. Ever since the year of 2000, U.S. dollar has not flexed his muscle like in 2015 and it seems like that trend-line will continue in the same direction.
Forex trade and Stronger US Dollar
For all of you who trade major pair USD/EUR this was the greatest challenge to jump on the running train. Let’s not get surprised if we see the exchange rate of “one for one” in near future. Back in time, Euro use to be 20% stronger and if the trend continues at this tempo, we should not be surprised to see the same scenario like in the year of 2000 when many countries in Europe did not believe in new emerging currency called Euro, but instead kept their USD savings for rainy days.
Export of U.S. products
Stronger US Dollar means less export and higher buying power of imported products. In the year of 2006 we all remember when U.S. dollar dropped so low to the point that export of U.S. vehicles exploded. Port of destination known as Bremenhaven use to be one of the favorite destination for all “cheap” Corvettes. Are we now going to experience situation when Vessels are going the opposite direction?
Freight industry growth
Regardless which major currency is dramatically growing or falling, shipping industry is the first one to feel the benefits. Export of import – it does not really matter as long as the phone rings and bookings are placed. Large freight forwarding companies in situations like this also have major shifts in workforce by moving their stuff within the company from export to import sector. Quantity of shipped products will reflect on shipping rates in this hot market where major players such as Kuhne Nagel try to lower purchasing rates to almost ground zero.
Winners at 1.10 exchange rate
Ever since the middle of February 2015, USD growth temporary stopped on USD 1,10. Any sort of news could determine direction at this point. Financial struggle in Greece might help USD to continue in the same direction, so as the lower price of gas and lower unemployment rate in the US. EU feels Russian sanctions way more than the U.S.
Some experts predicted that the decade of stronger US Dollar just started.