USD 07 (Apr 23 - Dec 27)

[winston]

Dollar under fire again as investors reassess Trump policies, geopolitical risk

By Amanda Cooper, Dhara Ranasinghe and Samuel Indyk

Market measures of volatility are still running hot and bond market sentiment is fragile, not least because of an aggressive selloff in Japanese government debt that could spill over into Treasuries, while gold’s relentless scaling of new records is a sign investors are seeking alternative safe-havens.

The Fed is still expected to cut interest rates at least twice this year, while other major central banks are pausing or could even hike rates.

On Friday, the Bank of Japan, together with the New York Fed, was suspected of making a series of rate checks for the yen, a possible precursor to the first bout of joint Japanese-U.S. intervention in 15 years to boost the Japanese currency.

Source: Reuters

https://www.investing.com/news/economy- ... sk-4465673

[behappyalways]

Dollar sinks to lowest level in four years as US risks grow
https://www.theedgesingapore.com/news/c ... risks-grow

[winston]

Be careful what you wish for on a weaker US dollar

The greenback’s index against the most-traded currencies has dropped to its weakest since early 2022 – worse could happen yet

The big concern for Washington about sowing seeds of a US dollar devaluation is what that may mean for the stability of gigantic net foreign ownership of US assets.

by Mike Dolan

The US may well have supported Japan on the yen simply to prevent an explosive rise in Japanese government bond yields going global.

Net foreign ownership of US assets – more than US$27 trillion and rising.

The prospect of unhedged US stocks and bonds suffering a 10 to 20 per cent US dollar hit, may well destabilise that unprecedented investment imbalance.

Source: Reuters

https://www.businesstimes.com.sg/opinio ... -us-dollar

[winston]

Will ‘Sell America’ end the dollar’s hegemony?
State and market-led pressure to de-dollarise could become mutually reinforcing, accelerating the erosion of the greenback dominance

The US dollar is unique among global currencies in that its value is driven not just by supply and demand, but also by its structural power.

by Erin Lockwood

Four big questions about the future of dollar hegemony in an era of geopolitical turmoil.

1. Is there a viable challenger to the dollar in international markets?
Just over half of foreign trade is conducted in dollars, 90 per cent of foreign currency swaps involve the greenback, and 58 per cent of foreign central-bank reserves are denominated in it.

2. Who is supposed to be on the other side of the sell-America trade?

3. Whether current holders of US debt would be willing or even able to bear the costs of selling it, given the logic of mutual assured destruction (Mad).

4. How much is this a political, rather than economic issue?

Source: Project Syndicate

https://www.businesstimes.com.sg/opinio ... s-hegemony

[winston]

A crisis lurks as Asians bring money back home
Repatriation or the ‘Sell America’ narrative, will be a key theme

The renminbi's recent winning streak against the greenback – the longest in over a decade – is a sign that Beijing is warming up to the idea of a stronger renminbi

by Shuli Ren

Historically, the Kospi and the won were largely in sync, simultaneously selling off during previous crises. But lately, that relationship has broken down; the Kospi’s blistering rally has been met with a won depreciation.

One explanation is capital outflows. Even though the country’s exports are at a record high, retail investors have been wading into the Nasdaq. Last year, they bought US$32 billion in US stocks on a net basis, also a historical peak.

In the last two years, global trade imbalances have been on the rise, led by China, South Korea and Taiwan.

As China’s trade surplus ballooned, rising from roughly US$820 billion in 2023 to US$1.2 trillion last year, a vast pool of companies’ overseas sales were parked in Hong Kong, where US dollar deposits grew by about US$320 billion.

Source: Bloomberg

https://www.businesstimes.com.sg/opinio ... -back-home

[behappyalways]

Iran just offered to reopen the Strait of Hormuz. But only if you pay in yuan.
https://x.com/shanaka86/status/2032601057847816672

[winston]

Why USD is the only safe haven in FX

by Sam Boughedda

Quant models show investors are increasingly preparing for a “longer war and higher energy prices,” with market positioning shifting decisively toward the dollar.

Even traditional safe havens are weakening. “EUR and JPY have also been in supported downtrends vs the USD for several weeks, and even the mighty CHF has lost its uptrend,”

Source: investing.com

https://www.investing.com/news/forex-ne ... fx-4566097

[behappyalways]

U.S. Dollar share of global foreign currency reserves have fallen to its lowest level this century
https://x.com/Barchart/status/2038578398046429641