We’ve heard a lot on the news lately about the woes of Greece and how it has weighed upon the euro.
Anytime something is bad for the euro, it’s almost always good for the dollar.
The euro has been nicknamed the “anti-dollar” by traders.
That’s because if traders go out of the U. S. dollar, the next biggest place to go is into the euro.
This causes these two currencies to trade very opposite of one another.
But it’s not just the Greece news now that ends up helping the dollar in a roundabout way.
Right now, we’ve got U.S. war ships moving closer to Iran.
It seems the ships move closer and closer to Iran every time Iran says it is pushing through with their nuclear program. Iranian officials say they are just making energy.
Meanwhile, the rest of the world fears that they are making a nuclear bomb.
After all, I’m sure they’d love to blow the U.S. off of the face of the map.
Well actually, there’s a Senate bill (S. 2799) that could help to speed up a war between the U.S. and Iran — which would cause a ripple through the currency market.
What is this bill?
It is a bill that would punish any company that exported gasoline to Iran.
Even though Iran has an abundance of oil, it has to get that oil refined.
Iran doesn’t have enough refining capacity so it has to import 40 percent of its gasoline as a result.
Now if they instantly lost 40 percent of their fuel, I can assure you that a war with the United States would begin.
In fact, it could turn into a war between Iran and the United States, Europe and Israel very easily.
Iran hates the West…so we’d likely not fight this battle alone since Europe is almost as hated as the United States from Iran’s stand point.
So why Israel?
Iran has already publicly threatened to blow them off of the map.
Iranian officials hate Israel at least as much as they hate the United States.
Here’s another reason why this war could come about: Obama needs an image overhaul.
It could change the public perception of him if he were to attack Iran and its nuclear facilities.
This is why it should be taken seriously as these war ships move ever closer to the Gulf region.
Why does this all matter to the currency trader/investor?
It’s because money tends to run toward the world’s reserve currency and to the one that would be the most likely victor in that war (which again would be the United States).
So if a war broke out there, you’d see money run away from places all over the world and into the greenback.
This would cause a heck of a dollar rally that would likely at least last for months.
Therefore, keep a sharp eye on this bill that’s in the Senate.
Also keep an ear open on Obama’s speeches. (I know it’s tough, but please try.)
See if his tone changes and gets tougher on Iran.
If he declares war on Iran…or if we put these stiffer sanctions into action and they vow to attack us, get ready for the U.S. dollar to rally!
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