Dollar versus renminbiDespite a likely third straight year of $1 trillion U.S. budget deficits, and the U.S. Federal Reserve's controversial quantitative easing program, the U.S. dollar has basically remained flat against the world's other major currencies. Compared to the British pound, it has barely budged over the past year, going from $1.6153 to $1.6093. At the same time, it fell a relatively small 4% against the Canadian dollar and went up 5% against the euro.

Admittedly, the dollar lost a substantial 10% of its value against Japan's yen, but unless you're willing to "park" your money in Japan's famously low-interest banks for almost no return, the yen is not a worthwhile option. By extension, that same drive for yield/return will probably discourage many institutional investors from trading in their dollars for yen.

If the dollar's resiliency in 2010 didn't surprise you enough, try this on for size: There's a decent chance the dollar may rally in 2011, rising in value against other major currencies. Here's why:

U.S. budget deficit reduction progress.
First, it seems likely that there will be progress in reducing the budget deficit in 2011. That may be hard to believe, given that the Democrats and Republicans in the past week courageously said "you go first" regarding entitlement reform, but the important point is that the structure of the debate has changed. The debate is no longer focused on spending increases; instead, it's looking at how much will be cut and where the slashing will occur.
Analysis: Dollar bullish.

Euro-zone debt concerns.
The European Union has made strides addressing its sovereign debt woes; for example, it's poised to increase the size of its bailout fund. Still, at least two large-debt nations, Spain and Portugal, remain under "24-hour observation." While the pair will probably will avoid a bailout, the chance that they might need one -- and the negative impact that such a bailout would have on the euro -- is likely to keep investors nervous about the euro for the next year.
Analysis: Slightly dollar bullish.

Dollar as global reserve currency. Eventually, globalization may lead to the adoption of several reserve currencies. In fact, the euro, yen, British pound and Swiss franc already play supporting roles. For the time being, however, institutional investors are not yet ready to abandon the dollar-dominated reserve currency system -- a status that continues to boosts the dollar's value.
Analysis: Dollar bullish.

U.S. economic expansion. Finally, there's the U.S. economy. After the longest and most painful recession since the Great Depression, the world's largest economy appears to be headed for a better-than-adequate performance in 2011. U.S.-based companies, including many multinationals, are lean, cash-flush (they've amassed about $2 trillion in cash), and are well-positioned to take advantage of the global growth cycle. That bodes well for earnings growth. And because these are largely dollar-denominated investments, it will increase demand for dollars.
Analysis: Dollar bullish.

So whether you're talking about the deficit reduction, Europe's debt woes, currency reserves or the multinational-led U.S. economic recovery, the stars appear to be lining up for a decent year for the dollar. Of course, the outbreak of another war involving the U.S., an unforeseen natural or man-made calamity (such as terrorism) or a major and sustained disruption in the flow of imported oil could all result in a bad year for the buck. But minus those, look for the dollar to hold its own in 2011.

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Dereck

Major Fraud Alert


The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

The person they sued through a LLC. Debt Collection Company and Law Firm was the "World Fortune Owner" who "Counterclaimed" and won.

Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

Businesses owned by the States (Public Corporations) are being sold Stock Shares by Corporations also under the Federal Banking System in this Worldwide "Ponzi Scheme". The World Fortune Company Merrick Inc. Sweden is dissolving Millions and Billions of Dollars from "All Levels of Government"in the U.S. of Financing based upon Years of "negligent inaction" involving this case.

The Federal Government has already been forced to discontinue supplying the Financing States use to pay their debts, Persons in Government Offices may want to begin to take their jobs more seriously, these are different times from 10 Years ago and you will not be accepted civil servants here just because you say you are here to do the right thing.

May 29 2011 at 1:14 AM Report abuse rate up rate down Reply
caohellsux1978

The world's largest publicly traded company on Thursday reported net income of $10.65 billion, or $2.14 per share, in the first three months of the year. That compares with $6.3 billion, or 1.33 per share a year ago. Revenue increased 26 percent to $114 billion.

The results surpassed Wall Street estimates of $2.04 per share on sales of $112.6 billion, according to FactSet.

The quarter was Exxon's best since it earned a record $14.83 billion in 2008's third quarter. It comes at a time when some drivers are paying $4 or more for gas and President Obama is threatening the oil industry's multibillion-dollar tax subsidies.

Earnings grew across the company's business segments. Income from its exploration and production business gained 49 percent to $8.7 billion while the company's downstream business, which includes refineries, posted a huge 30-fold jump to more than $1.1 billion.

Anticipating a strong reaction to the results from drivers and politicians, Exxon said on a company blog Wednesday that it has little control over the price of oil, which has risen to near $113 per barrel. The company also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

Now, are you still going to blame the Middle East?

BOYCOTT EXXON/MOBIL NOW THROUGH JULY THE 4TH. BUY YOUR GASOLINE ANYWHERE BUT EXXON/MOBIL, OR ONE OF THEIR MOM AND POP STATIONS. BOYCOTT THEM, AND CUT INTO THEIR PROFITS AND THEY WILL HAVE TO LOWER PRICES.

April 29 2011 at 8:36 AM Report abuse rate up rate down Reply
djohneric

"Major disruption in the flow of imported oil"?????? Why are we still sending $800 billion to the middle east when the US has the second largest reserve of Natural Gas and Coal (we do have clean coal technology) and many say that the US has the largest reserve of cude oil (taped and untaped) in the World?

Oh, wind and solar energy sounds good and does get votes from the uninformed However, if we spent trillions of dollars on wind and solar energy, it might supply 25% of our energy needs. Should we continue with wind and solar? YES
But, we need to continue to pump and dig to supply our needs, OR, some one needs to tell the American public to get rid of all cars but one, stop air-conditioning our homes, turn the thermostat down, get rid of all our gas guzzling toys. Oh yah, that'll go over like a lead ballon.

February 24 2011 at 10:16 PM Report abuse rate up rate down Reply
bfpowersjr

Mr. Lazzaro: Your readers might be interested in a comparison chart of the dollar and euro which can be seen at www.bigcharts.com: Enter EU (euro)... advanced chart... 3 years... daily... compare to... UUP (dollar)... draw chart.

February 22 2011 at 8:10 AM Report abuse rate up rate down Reply
Pat

Guess I pushed the wrong button! For many of you, a close reading of THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER by Richard Wilkingson and Kate Pickett would be an eye opener. Their well documented book demonstrates why our present situation with 85% of all wealth in the United States held by 10% of the population and stagnating income for the bottom 90% for the last 30 years is an unhealthy arrangement. Other informative articles such as "Who Rules America!" by Professor G. William Domhoff explains much and "Income Inequality in the United States, 1913-2002" by Thomas Piketty and Emmanuel Saez further illuminates the subject. The last two articles may be a little difficult for some to read but they are worth the effort because the information they provide is not easy to dig out of governmental reports.

February 22 2011 at 6:35 AM Report abuse rate up rate down Reply
1 reply to Pat's comment
icemanbill23

Thanks Pat!...I might also recommend to our other liberal readers: "The Communist Manifesto" by Karl Marx..it's great!!

February 22 2011 at 5:20 PM Report abuse +1 rate up rate down Reply
Pat

For many of you, a close reading of THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER

February 22 2011 at 6:28 AM Report abuse rate up rate down Reply
Pat

For many of you, a close reading of THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER

February 22 2011 at 6:28 AM Report abuse rate up rate down Reply
Pat

For many of you, a close reading of THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER

February 22 2011 at 6:28 AM Report abuse rate up rate down Reply
Pat

For many of you, a close reading of THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER

February 22 2011 at 6:28 AM Report abuse rate up rate down Reply
Pat

It is really too bad that the dialogue is still driven by Tea Party Republicans because instead of all these dramatic cuts to programs that support the 90% of the people who hold only 15% of the wealth in the United States the dialogue should be about eliminating the privilege of the wealthy to stow their wealth away into dynasty trusts that exist in perpetuity, can be manipulated so that their beneficiaries never pay tax on the appreciated value of the assets held by the trust, no estate taxes are ever paid, and the number of useless trust fund babies increases as they grow up to be parasites on society since they never contribute anything of value to our world except to create more trust fund babies. According to the New York Times article of July 11, 2010 this is one more thing we have to thank the bankers for and the solution is simple. Congress needs to close the loophole in federal tax law that allows these "generation skipping" trusts to perpetually avoid paying taxes. The tunnel vision ideology of the Tea Party Republicans and, indeed, most Republicans stands in the way of this solution. Throw the bums out!

February 22 2011 at 6:25 AM Report abuse -1 rate up rate down Reply
1 reply to Pat's comment
icemanbill23

Your liberal ideology is so yesterday Pat...your progressive "solution" doesn't work here in America and hopefully never will. The Tea Party is the "solution" we need right now to cure the dreaded disease of your progressive liberalism that's ruining our country!

February 22 2011 at 5:28 PM Report abuse +1 rate up rate down Reply