The dollar recently hit a 26-year low against sterling and an all-time low against the euro. Just about everything is pointing to a lower dollar. US growth is disappointing (YC excepted ;-) and is set to underperform Europe [IMF]. US rates are expected to be cut later in the year whilst the UK and Eurozone are set to rise. The UK rate is already higher than the US, normally a predictor of bad things to come. US inflation is a bit high which lessens the dollar's appeal as a holding asset.
The US deficit, still 6%, is depending on the sale of US Gov. bonds. Oil producing nations are buying, and so are Asian central banks because they want to see their exports look cheap in USD. (Doesn't China hold USD1.2 trillion?)
The dollar looks set to drift lower. If holders get concerned they have too many and dump some of their wedge it'll plummet.
Interesting times. You could all be millionaires real easily. ;-)
The US deficit, still 6%, is depending on the sale of US Gov. bonds. Oil producing nations are buying, and so are Asian central banks because they want to see their exports look cheap in USD. (Doesn't China hold USD1.2 trillion?)
The dollar looks set to drift lower. If holders get concerned they have too many and dump some of their wedge it'll plummet.
Interesting times. You could all be millionaires real easily. ;-)
reply