Recent weeks witnessed a profusion of excited commentary on the dollar and foreign exchange markets. Some colourful reports suggested the greenback was in a free fall, a relentless sell-off, and a slump. Others conjured up the longer term – a sharp downward move raises questions that go to the heart of the global financial system and the dollar’s role. These stories are deeply exaggerated in their assessment of current and longer-term trends, let alone their conflation of the two. Markets have good reasons for bearish dollar sentiment. The US response to Covid-19 has been a flop, and some data point to a stalling ... (full story)