A Huge US Dollar Decline May Bring a Surge of Inflation

A Huge USD Dump may Bring a Surge of Inflation
A Huge USD Dump may Bring a Surge of Inflation

A Huge US Dollar Decline May Bring a Surge of Inflation

The US dollar lost about 2% of its value against other currencies and is trading at its lowest in past three years. This decline followed a 10% reduction in the dollar value in 2017.

USD is losing its value

According to the experts, the movement in Europe’s economy is causing investors to flock to the euro. Furthermore, investors believe that the Europe central bank will loosen up the massive bond-buying program that will make euro more attractive than the dollar.

Apart from the events happening overseas, the political dysfunction in the United States is another reason that is pushing the value of the dollar down.

The question is if this weakness of dollar will hurt the stock market or the US economy. However, this doesn’t seem to be the case yet!

A weaker dollar will help US multinational companies like Microsoft, Apple and Procter & Gamble earn more foreign sales and profits once they are translated into dollars. And these giant firms have helped the US lead the market.

A continuous decline in the value of the dollar can surely become a problem as a massive decline in the dollar can bring a rush of inflation. And nobody wants that!

However, this scenario is unlikely to happen anytime soon. Also, bitcoin may be making a lot of news but it’s improbable that it will replace the greenback as of yet.

Developing countries are taking “cryptocurrency v/s USD” seriously now

In our news article on African countries urging central bank to buy bitcoins over USD, we explained about how different factors are affecting the value of USD that may lead to the drop in its value. Even the African businesses took to the social media to bring the “less reliance on greenbacks and more investment in bitcoin” issue into people’s attention.

With the rise in the interest rates of the Federal Reserve, it’s quite unfathomable to find the reason for the drop in the dollar value. Usually, the hike in the interest rate boosts the dollar value, the reason being it causes more foreign investors to buy American assets. Moreover, it keeps the inflation in check.

Though the US economy has enjoyed solid growth for two consecutive quarters, if we take a step back, we would see that the dollar is crashing.

With the start of a new year, the US dollar took a wrong footing and end up hitting a low point. Despite the dollar driving factors such as a healthy economy and tax cuts, the dollar plummeted. Actually, the dollar drops down about 10% last year and has been down 2% since mid-December.

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Author: Sunil Sharma

Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com

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Sunil Sharma 68 Articles

Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com

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