Collapse of the US dollar

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Gold   1856,61
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EURUSD   1,1541
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DAX   13095,27
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On Tuesday, something happened that should have happened sooner or later. The dollar collapsed again to all kinds of assets: stocks, currencies, commodities. The peculiarity of Tuesday is that some of the assets made new highs, which had not happened for a long time.


EUR/USD

EURUSD

For example, the pair EUR/USD broke the most important level at 1.15 and rose to the values we saw 1.5 years ago. The growth of the European currency was further promoted by the adoption of the EU budget. European leaders, after long negotiations, agreed on it at the level of about 1 trillion dollars for 7 years. This is a powerful positive for the EURO. It shows that, despite all the disagreements, European countries have managed to tackle the main challenges together.


S&P 500

An important outcome of the day was the consolidation of the S&P 500 index above the opening of this year. While the situation, compared to the beginning of the year, looks simply terrible. In one of the upcoming mailings we will compare in more detail what is happening in the world economy now. And what happened on January 1, 2020. Crazy growth in stock markets only confirms the flight of investors from the U.S. dollar. More and more economists say that the Fed has printed much more money than the American economy can digest.


Bitcoin

Only one asset class reacted sluggishly to Tuesday’s events. We’re talking about cryptocurrencies. Although bitcoin came out of the consolidation of recent days, the movement was weak. There is no certainty that the price will not fall back to the levels of $9100-9200. Why is the first cryptocurrency refusing to rise? It seems to us that the situation will not change until the psychologically important $10,000 level is broken. Investors and speculators believe in this development less and less. And only confident fixation above this value will change the point of view of market participants.


What’s waiting for us today?

14:30 Basic Consumer Price Index in Canada for June
16:00 U.S. secondary housing market sales for June
17:00 Address by ECB Vice President de Gindos.


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