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Strategies & Market Trends : Currents of Currency
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To: Ahda who wrote (419)8/24/2015 12:04:41 PM
From: Ahda  Read Replies (1) of 594
 
Inflation Detriment

The dollar’s surge may restrain inflation and limit the Fed's ability to raise interest rates, punishing the U.S. currency against some major counterparts, according to Nomura Holdings Inc.

``In coming months we'll be looking at import price deflation that is the most severe we've had for many years,' said Jens Nordvig, a managing director of currency research at Nomura. ``There may be opportunities to fade dollar gains in Group-of-10, where the direction of the Fed really is a key driver.'

The currency market if a lucrative trade it is not always lucrative for people. Business tries to hedge currency protecting itself from a loss. People end, the working labor end find as currency changes value prices of products imported from elsewhere can be far less costly. The negative of the less costly price is if the production of a product is far more costly in your nation you loose jobs to the less costly area.

If your currency has increased in world exchange value you could possibly buy 1 !/2 times more goods for the same amount as you bought one good before. You are exchanging your currency for a far less costly one with which you will purchase the goods. That lower value currency stops inflation in your area of certain product prices, 11/2 times more same amount of your currency.

The lower price of bought from elsewhere product can off set your areas wage inflation.
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