Dollar exchange rate is preparing to collapse

A strong dollar is becoming a big problem for the Trump administration and will be tackled in the near future, despite the Fed’s tight monetary policy, according to Daily Reckoning.
The dollar exchange rate on Tuesday morning is rising in relation to world currencies. As of 8.10 Moscow time, the dollar index grew by 0.1%, to 96.66 points. The euro exchange rate to the dollar rose to 1.1381 dollars from 1.1372 dollars per euro at the previous close, the dollar against the yen rose to 112.72 yen per dollar from 112.37 yen in past trading, PRIME reports.

As the newspaper notes, both the White House and the US Treasury are confident that the strengthening of the dollar does not allow the American economy to realize its full potential. At the same time, the Treasury has its own tools that will allow not resorting to direct pressure on the Fed leadership, but to achieve a decline in the US currency through direct market interventions.
For these purposes the Stabilization Fund (ESF) can be used. It is important to note that the ESF is completely outside the control of Congress. This means that the Treasury can at any time intervene in the situation on the foreign exchange market.
Today, the ESF has net assets of about $ 40 billion. According to the publication, this is quite enough to conduct interventions against individual currencies and the best time for this is mid-November, when mid-term elections will be held in the USA
The main purpose of currency manipulation by the United States will be the Chinese yuan, which in recent days has reached a 10-year low against the dollar. This is an extreme irritant for the Trump administration.
Earlier, in September, the Chinese ambassador to the United States, Cui Tiankai, said that during the trade negotiations, Washington proposed a deal to weaken the dollar against the yuan, following the pattern of the Plaza Accord of the mid-80s. However, Beijing categorically rejected this proposal.
However, the euro is “prohibitively” weakened to the US currency, and in the case of drastic measures by the US authorities, it may soon return to levels of 1.20-1.30 dollars per euro.
The stakes for Trump are high, as he is determined to run in the 2020 election. The fiscal stimulus is gradually fading away and the weakening of the dollar may become a new lever that will support high growth rates of the US economy, sums up the DR.
The official dollar rate set by the Bank of Russia for October 29, 2018 is 65.63 rubles, the euro exchange rate today is 74.66 rubles.