And there\u0027s more to come. Read on
It was late on July 13, about 10:45 p.m., and there was an urgency to the texts and calls that came flooding in. The euro had just crashed through parity against the dollar, a level once almost unthinkable, and everyone — clients, fund managers, traders — wanted to know what Boubouras, the head of research at K2 Asset Management, recommend they do. His response was simple: “Don’t fight the dollar right now.
The dollar, the currency that powers global trade, is on a tear that has few parallels in modern history.
“There is no kryptonite to blow up the dollar’s strength immediately, with the Eurozone hampered by the war in Ukraine and China’s growth uncertain,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “There is simply no alternative to the dollar no matter where you look and it’s pummelling everything else as a result — economies, other currencies, corporate earnings.
Demand for the dollar has been hot for a simple reason: when global markets go crazy, investors look for a safe haven. And as the Bank for International Settlements put it, that security is “fulfilled now primarily by the U.S. dollar.” The size and strength of the U.S. economy remains unparalleled. Treasuries are still one of the safest ways to store money and the dollar makes up the lion’s share of foreign-exchange reserves.
For many emerging markets the damage has been even worse. The Indian rupee, Chilean peso and Sri Lankan rupee have touched record lows this year, despite efforts by some central banks to try to slow the fall. Hong Kong’s monetary authority has bought local dollars at a record pace to defend the city’s currency peg, while Chile’s central bank began a US$25-billion intervention after the peso sank more than 20 per cent in five weeks.
“Only when investors are prepared to embrace high risk assets again do we expect the dollar to turn and this may not happen until the market is convinced that the Fed has changed course,” said Jane Foley, head of FX strategy at Rabobank.Article content
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Governments ramp up demands for user info, Twitter warnsTwitter warned Thursday that governments around the globe are asking the company to remove content or snoop on private details of user accounts at an alarming rate.
Read more »
Canadian dollar pulls back from 6-week high as U.S. economy contractsLoonie at 78.03 U.S. cents
Read more »
Canadian dollar edges up ahead of expected U.S. Federal reserve rate hikeLoonie at 77.72 U.S. cents
Read more »
Follow a trail to answer riddles, win prizes (18 photos)SooToday hit the Hub Trail to find folks searching for answers while exploring the trails
Read more »
Springer caps off grand night at the ballpark to spark Jays to seventh win in a rowGeorge Springer stole the show Tuesday night with one swing of his mighty bat.
Read more »
Springer caps off grand night at the ballpark to spark Jays to seventh win in a rowGeorge Springer stole the show Tuesday night with one swing of his mighty bat.
Read more »