Great recap - went on a world tour of economy on my notebook. Does the strengthening of the US Dollar (Risk Aversion) work against the US in the long-run OR is the market helping in the long-term orderly unwinding of Dollar as the reserve currency of the world - we sometimes need to take a step back to take two steps forward.
Strenghtening of the US Dollar would work against the US, in my view. This is unlikely to be an unwinding trade of the $ since gold turned weak. I would see gold as the only alternate for central banks. (Normally gold and US$ are inversely correlated. However if money was moving from one to the other, gold should have held its ground).
Hi Deepak,
ReplyDeleteGreat recap - went on a world tour of economy on my notebook. Does the strengthening of the US Dollar (Risk Aversion) work against the US in the long-run OR is the market helping in the long-term orderly unwinding of Dollar as the reserve currency of the world - we sometimes need to take a step back to take two steps forward.
Thanks
Sheshadri
Strenghtening of the US Dollar would work against the US, in my view. This is unlikely to be an unwinding trade of the $ since gold turned weak. I would see gold as the only alternate for central banks. (Normally gold and US$ are inversely correlated. However if money was moving from one to the other, gold should have held its ground).
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