Doubts Double Over Continued Dollar Decline

wall-street-signThe Wall Street Journal recently reported that investors are questioning the so-called U.S. economic recovery. While many reports show that investors are rallied behind an upswing, the Wall Street Journal Dollar Index has shown that the dollar is down and actually hit a seven-week low last week.

Fund managers are pointing towards the Federal Reserve’s lack of restraint in printing new money and other policies that have caused issues for investors on the dollar. The Federal Reserve also has yet to cut down on the bond-purchase program, which pumped $85 billion into the economy every month. It isn’t a smart idea according to most financial analysts and budget managers.

Many investors and financial analysts are actually calling for the Federal Reserve to stop printing money and cut back on these policies which are driving the value of the dollar down. If they were to make changes to this effect, the dollar would instantly increase in value. It would be a positive signal for traders and investors alike. In addition, it may detract people from investing outside of the dollar as well.

As retail purchases and job growth continue to be down, it’s clear that even with new printed money, people aren’t able to return to their normal consumer habits just yet. It’s unclear how this will affect the last quarter of the year and into the new one.

Investors are increasingly unsure of what’s going to happen with the dollar, and while many are predicting a rise after necessary cuts by the Federal Reserve, the question is whether it will really matter if the dollar falls too low.

Tags: ,