The us dollar is the first currency of the forex. In other words, it is the best currency processed on the currency market. The advance is significant as the us dollar USD is present in nearly 90% of the transactions.
How to optimize trading in the dollar ? This is what we will see today.
The greenback : a safe-haven currency history
In recent decades, the u.s. dollar has gone through many financial and economic crises, but it has never sunk. If today, the status of the 1st economic power of the world the United States is being challenged by China, the country remains one of the key engines of the global economy.
In a period of recession, crisis or strong risk aversion on the financial markets the traders favour the safe-haven securities less risky. The dollar therefore tends to appreciate in value.
The u.s. economy strongly influences the dollar USD
The growth of the United States is an important engine of the economy worldwide, but it is sensitive to different economic cycles. Concretely, in the phase of recovery or expansion in the u.s. growth is, in general, among the highest of those recorded by the developed countries. When the situation is reversed and that the growth slows down or becomes negative then the impact is both immediate and powerful.
Role of the central bank of the United States
Since the subprime crisis of 2008, the fed has stepped up efforts to revive the u.s. economy. In particular, it has lowered the interest rates and used various programmes of Quantitative Easing.
The u.s. dollar is based mainly on its safe-haven status and the level of growth printed in the country. These two factors are the origin of most of the underlying trend pairs including the u.s. dollar. The actions of the fed are going to increase the range of movement bullish or bearish and create volatility in the short term.