FOREX - Trends, Forecasts and Implications (Episode 13: March 2012) - page 249
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The US dollar has been rising faster than other key currencies recently. The strengthening of the US currency is linked to positive data coming out of the US (retail trade, labour market, Empire State and Philly manufacturing indices) and rising yields on Tregers. 15 out of 19 major US banks have successfully passed the stress tests. Furthermore, a new round of QE is unlikely in the near future.
According to many experts, the dollar is gradually ceasing to be a shelter currency and is becoming increasingly dependent on economic growth (i.e. a pro-cyclical currency). At the same time, in times of economic instability, traders are still likely to prefer the dollar over other high-yielding assets.
Today the US economy looks significantly "healthier" than the European and Japanese economies. Thus, the United States stands out because it promises investors more returns than the eurozone or Japan and more security than Australia or Canada.
Rising oil prices will also contribute to a stronger dollar: firstly, expensive oil will increase inflationary pressures - an argument against QE, and secondly, further increases in the price of "black gold" will stall the global economic recovery, returning investors to the need to seek a safe haven, in which role the dollar has few alternatives.
Nevertheless, analysts at RBC Capital Markets warn that investors' expectations of US economic growth are too high. Continued improvement in economic data will be needed to satisfy market appetite. If the new data fails to meet traders' expectations, participants will be severely disappointed.
Despite talk of a potential strengthening of the dollar, there are still some risks associated with a bullish stance on the US currency. In particular, analysts at Merk Investments remind us that as yields on Tregieris increase, their prices are falling. Thus, 30-year securities have lost 8.5% of their value in less than a month. Decline in prices of US government debt negatively affects those who are already holders of Tregers. Experts believe that the emergence of a bear market in U.S. Treasuries may force foreign investors to liquidate their investments in these bonds by repatriating funds or investing them in non-dollar assets. In this case, the dollar would weaken.
Analysts at Goldman Sachs believe that the rise in the dollar was due to few reasons. From their point of view, when the exchange rate movements are based on very few factors, and even a slight bump will be enough to change the direction of the movement. As a result, specialists expect a renewed weakening of the dollar across the board.
at the dnjs, the ISU showed up.
at the dnjs, the ISU showed up.
sold to the neck?)))
I've got it like this for now. I'm planning to sell from 3214 or 3245 as it goes I'll decide.
- We will continue to defend this peg level at all costs.
- For this purpose, we are ready to buy foreign currencies in unlimited quantities.
- We intend to maintain high liquidity in the markets.
- The SNB is prepared to take the necessary measures at any time.
- Geopolitical risks and the euro crisis cloud the outlook somewhat.
Keyword: ECONOMY
Sausage in the market, silence on the forum...
Where are you people?