What is the future of US Dollar? Will Dollar index move to 100 or to 60 in the middle of a financial meltdown?
Sam Adelton
Jul. 14, 2007

The natural answer from currency analysts is that dollar will fall apart and travel below 70 levels in the US Dollar index, which is the trade, weighted average of major currencies.

US Dollar never traded below 78 in terms of US Dollar index. The million-dollar question is will dollar fall below 78?

If the stock market bubble really bursts and real estate continue to go down creating chilling effects through out the banking system, what will happen to US Dollar?

According to some analytics, dollar will get stronger after the stock market bubble bursts. The US dollar index can actually reach 120 in the next several years while massive meltdown takes place in the economy.

The trade imbalance will actually get corrected after a worldwide stock market crash. The meltdown will make people understand globalization cannot happen when apples are compared to oranges.

Currently US Dollar trades as a function of interest rate differential between major economies. After a financial meltdown dollar trade based on US economic strength. After the financial meltdown, US will be the strongest economy in the world. Economies other than US will actually get depressed.

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