Many factors can put a strain on a country’s currency.
In the case of the United States, technical indicators are pointing to a decrease in dollar value against the Japanese yen.
Why is this happening?
What does it mean?
Is there a strategy in place to change this?
We’ll explain all that and more. Read on.
Factors That Impacted the Dollar Bill Value Drop
The dollar bill dropped in late January against the yen. This was right around the time that President Donald Trump announced he was enlisting traveling bans that would prevent refugees from entering the country.
Wall Street stocks dropped to their lowest point in 2017 as that news emerged. Although it’s still early in the year, this was not a promising start.
That’s not all that hurt the value of the dollar.
In early February, Trump went to Japan to meet with that country’s Prime Minister, Shinzo Abe. The two discussed their $69 billion (and counting) trade gap.
While that meeting caused no problems, it was what Trump said afterward that strained the dollar even more. He stated that Germany, Japan, and China were attempting currency devaluing. Trump said this would give them a greater trading advantage compared to the US.
A third factor that played into the dropping value of the US dollar is the price of gold. Set at $1,193.20 per ounce as of earlier this year, that’s a 0.4 percent uptick in value. Financial experts believe this has to do with worries about Trump’s decisions as president.
What the Technical Indicators Say
US dollar value is now in decline, but yen value has increased. In fact, it’s only been this year, following the election, that the currency has rebounded.
According to the Ichimoku cloud from earlier this year, yen tested at 109.90. Some investors believed going into this year that the US dollar would lead under Trump’s presidency, but this doesn’t seem to be the case.
Experts believe the test value will stabilize at 109.93 yen.
So what can be done about the drop in value of the US dollar?
As of now, it appears that the best strategy is to take a wait and see approach. Financial experts do believe that the value of the dollar should increase, but it may get worse before it gets better. Yen value may also follow suit.
As of this year, the value of the American dollar against the yen has decreased. This is mostly due to decisions and comments from US President Donald Trump. The trade gap between Japan and the US isn’t helping matters either.
While the yen’s value has rebounded, both the value of the dollar and the yen may drop further, suggests technical indicators.
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