Revisiting the US Dollar View and Its Implications for EM Currencies

Smartkarma
2022-04-27

As the US dollar approaches its highest level in a decade, I reiterate my view of the dollar remaining strong in the near term. As the year progresses, I expect the dollar to weaken.

  • As the US dollar approaches its highest level in a decade in line with my expectation, I reiterate my view of the dollar remaining strong in the near term.
  • The dollar spike coincides with the rise in US rates volatility, which makes sense as the market is trapped between Fed tightening and risk aversion arising from rising recession probability.
  • As the year progresses, I expect the dollar to weaken and the environment to turn supportive of EM currencies. Until then, I recommend relative-value trades and hedging with the euro.

By Gautam Jain, PhD, CFA - https://www.smartkarma.com/profiles/gautam-jain-phd-cfa?utm_source=tiger_community

On Dollar Index (DXY CURNCY) - https://www.smartkarma.com/entities/u-s-dollar-index-usdx?utm_source=tiger_community

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Leave a comment
1