How does the strengthening dollar affect your personal finances?

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One of the effects of the current economic situation in the world at the moment is the notable appreciation of the US dollar against the euro. Aspects as relevant as those that are happening in Argentina or the rebound in the oil price it is causing a strengthening of the North American currency. This movement of the exchange rate has positive and negative effects on your personal finances from now on and you will need to know them in order to take advantage of this very special situation that occurs in the exchange market.

En principio, el fortalecimiento del dólar estadounidense frente a la moneda única europea no es ni malo ni bueno. De no ser así, todo dependerá de tu capacidad de reacción ante este nuevo escenario que se presenta en la economía internacional y fundamentalmente en el mercado cambiario. Tienes una strategy muy efectiva para aprovechar estos movimientos aparentemente temporales y es yendo a la currency markets. The reward for your actions can be more than satisfactory, but as long as you recognize that they are operations with a lot of risk.

This risk increases when you do not have a certain learning to operate with these types of markets. Because it is totally true that you can earn a lot of money, but for the same reasons you can leave a lot of euros on the road. To this end, it cannot be forgotten that if the currency market is characterized by something, it is by its high volatility. It is much more pronounced than in other financial markets. As an example, the stock market or those of raw materials or precious metals. This is one of the reasons why you should bring more experience in this type of investment operation.

Commercial or very fast operations

If you want to take advantage of the bullish movements of the US dollar against the euro, the most satisfactory option is to opt for commercial operations. Anyway that is one of the business possibilities para impulsar su cuenta de resultados de ahora en más. No es sorprendente que el mercado de divisas be muy activo y esté en pleno apogeo todos los días. Inclusive en horas de la tarde mediante los futuros basados ​​en este activo financiero. Si reúnes la experiencia necesaria, puedes intentar realizar estas operaciones tan especiales, pero siempre con mucha precaución para evitar riesgos innecesarios.

It is exactly through trading that you can approach the forex market. And how could it be less, improve your positions through the strengthening of the dollar against the euro. Above other class of financial instruments that do not pick up with such intensity this class of movements. In particular, if the rally in the US currency is not a conjunctural movementIt is perpetuated for the next few months or even years. In which case, it will be much easier to trade these financial assets. You can not forget this analysis if you want to make the savings profitable from now on.

How does the rise in the dollar affect?

If you look on the bright side, you will have no choice but to contemplate the more positive scenarios for your personal finances. They are much more than you can foresee from the beginning and anyway you can benefit while this current scenario that the forex market presents at this very moment lasts. Well, one of the most direct effects of a rebound in the US currency lies in the fact that imports within the European Union will benefit.

This action will cause the companies listed in the variable income and that they do not have a strong export component can improve their positions in financial markets. It is exactly that class of securities where you should go if you want to make profitable savings. Because its behavior will be better than in terms of listed export companies. As we might expect, they will suffer the weight of a dollar much stronger than before. In other words, everything will depend on the stock values that you select from now on.

More expensive imported products

On the other hand, there is the opposite effect. In other words, how this scenario can hurt you in the currency market. One of the most harmful formats is the one that has to do with the fact that the products you buy will be more expensive than before. Because indeed, Spanish consumers your purchasing power will be reduced, since they will pay more money for imported products. Some sectors that depend on these products are: food, pharmaceuticals, textiles, household appliances and vehicles. To the point that it will also be reflected in the equity markets.

Another aspect that may be affected by the situation of the US currency is that derived from its Trips abroad. Al punto que aquellas persons que viajan a Estados Unidos por trabajo o placer, pagarán más dinero por sus boletos de avión, tarifas de hospedaje y todos los gastos que se realicen hacia este destino turístico. Al mismo tiempo, no se puede olvidar que la subida del precio del petróleo puede fomentar las tarifas de estos servicios. Como ya está pasando con algunos de ellos. Como podíamos esperar, viajar de ahora en más estará sujeto a un plan monetario mucho más expansivo.

Impact on companies

On the other hand, Spanish entrepreneurs and in general all Europeans, who export their products abroad, will benefit, since they will be able to trade cheaper estos productos, lo que de forma automática los hará más atractivos en el mercado internacional. Este efecto se traslada inmediatamente a una mayor apreciación de sus líneas de negocio. Y que en el caso concreto de las sociedades cotizadas se verá reflejado con una mejora en su positioning o lo que es lo mismo, subirá el precio de sus acciones. Algo que pueden aprovechar los pequeños y medianos inversores que abran posiciones en alguna de estas propuestas bursátiles.

From this scenario, the market can generate authentic business possibilities where you can get large capital gains in all your operations on the stock market. Although on the contrary, you will also lose a lot of money if you do not choose the best of the proposals that are available in the equity market. Beyond other technical and perhaps even fundamental considerations. This is one of the scenarios that can be opened to you now in terms of what you have to do with your investments.

Investment in US dollars

More incentives to save in dollars? Well, actually, it may be another approach that this scenario that opens up in the forex market at the moment can be addressed. In any case, it must not be forgotten that there are thousands of hundreds of small and medium investors who have at least part of their savings in dollars. They do so from the different financial instruments that banks have designed. From the purchase and sale of shares on the stock market to investment funds or even the most aggressive derivatives.

Not surprisingly, this is the classic strategy of buying a few dollars in cash "to put under the mattress." It is a measure that points protect you from unwanted movements. Aimed at a very defined investor profile and is that of a flexible person who knows how to adapt to the new scenarios that have caused the movements of the US dollar.

On the other hand, everything depends on a myriad of factors, such as whether there are other investment alternatives, the tax regulations of the specific country and the preferences against the risk that an alternative investment entails. Something that will not always be easy or simple and that can create more than one dislike from this moment. Whatever the case, the strength of this currency is a new scenario that you should consider to invest from now on. Do not forget it to achieve maximum profitability.