Menu
Sister Sites

  • Everyone’s a Dollar Bull as Taper Makes U.S. Currency a Top Bet

    From bnnbloomberg.ca

    The dollar is starting to look unbeatable in the coming months as an anticipated tapering of stimulative asset purchases by the Federal Reserve, seasonal demand and energy-driven instability unleash a wave of bullish bets on the U.S. currency. Evidence of the greenback’s dominance is rampant across markets at the moment. Its value against the yen is at a December 2018 high, while CFTC data shows leveraged funds are the most bullish in over a year. Plus, risk reversals, which compare the costs of options, for the Bloomberg Dollar Index show investor sentiment is near the strongest since the pandemic’s first wave. ... (full story)

I disagree as per recent posts. Fed has already indicated there is no lockstep between end of tapering and increase in Fed Funds Rate and economy is already mixed at very least not pushing against capacity limits in spite of years of claims of inflation around the corner which never comes true.

On the bearish side we must not forget the impact on the debt servicing of USD public debt on the fiscal deficit where there is already anxiety over debt ceilings and further public spending blowouts. This is not a picture to attract conservative investors into USD just as a currency play. Finally I don't like the political climate and threats to democracy which are lying just below the surface.

Neither is the USD going up against all currencies. It can appreciate versus JPY and CHF if we are back in a Risk On world that's fine but there will be many better bets if that is the case e.g. commodity currencies.
Also whenever something looks like a sure thing, it's usually not.
in the next 5 months, the Treasury will issue more than 2.5t treasury bonds and the Fed will start tapering its buying soon, not to mention the supply disruption which might capsize the treasury market. you really think greenback gonna weaken due to the ceiling? I don't think so. Or the contrary, it gonna fly...
Quoting AnniLi
I disagree as per recent posts. Fed has already indicated there is no lockstep between end of tapering and increase in Fed Funds Rate and economy is already mixed at very least not pushing against capacity limits in spite of years of claims of inflation around the corner which never comes true. On the bearish side we must not forget the impact on the debt servicing of USD public debt on the fiscal deficit where there is already anxiety over debt ceilings and further public spending blowouts. This is not a picture to attract conservative investors...
The amount of people that don't understand interest rate ? who cares what the fed funds is when its clearly wrong
inflation right now according to the fixed US CPI is over 5% yoy ,while energy sky rockets
#doyourownanalysisordietryin
  • New Comment
  •  Guest
  • | IP XX.XXX.249.141
Join FF
  • Story Stats
  • Posted: Oct 11, 2021 6:54pm
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 4  /  Views: 1,785