The future of American Dollar

Is American dollar worth what it is today? Is the recent rally in the dollar justifiable? What is the near term and long term trend for the dollar? These are some of the common questions that linger around in the minds of some people today. This article is an attempt to explore the possible answers to the above questions.

Fundemental factors:
These are basically factors the develop slowly and have a long-term impact.

1. National Debt: U.S Treasury department periodically releases the report on countries holding the U.S debt. Even with a momementary glance through the report, you will find out that there are very few countries in the world to whom, U.S does not owe money.
2. Personal Debt: A statistics that i came across recently suggested that the number of outstanding credit cards in U.S is about 4 times the population of that country. I don't know the validity of the above statement but those who lived in U.S will acknowledge that the above statement is not very far from truth. The 'Credit Crunch is a classic example of the impact of personal debt. The crisis unfolded as 'some individuals' failed to make their mortgage payments in U.S. (Some people might not account 'Perosnal Debt' as a fundemental factor. But I do because a country is made up of nothing but Individual citizens. 'Personal spending' is also an Economic indicator widely followed by Wall Street.)

Technical Factors:-
These are the result price action in the relavant markets. These have a relatively shorter term impact compared to the fundemental factors.

1. Crude oil
2. Commodity consumption
3. Currency pairs impact

Political Factors:-

1. 
   

(to be continued........)


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