There is a risk factor that markets have not discounted. I call it Trumprisk.
Let's imagine a scenario where Democrats win back the House later this year while Trump gets into serious trouble vis a vis the Mueller investigation. Markets will definitely react to that by re-pricing all asset classes, and the question is how that will affect the dollar.
In the last crash the dollar (and treasuries, which basically are dollars that bear interest) got priced up against virtually everything, including most currencies. But this time I believe the opposite would happen as far as the dollar is concerned.
I'm basing this by looking at what happened the last time markets went thru a major re-pricing because of Trumprisk which was election night 2016, the short version of which was that after a very brief steep dive the dollar got bought against virtually all currencies for weeks.
So this time I would say the opposite is most likely to happen, with most of that going into euro and yen.
Anyone else have an opinion?
Let's imagine a scenario where Democrats win back the House later this year while Trump gets into serious trouble vis a vis the Mueller investigation. Markets will definitely react to that by re-pricing all asset classes, and the question is how that will affect the dollar.
In the last crash the dollar (and treasuries, which basically are dollars that bear interest) got priced up against virtually everything, including most currencies. But this time I believe the opposite would happen as far as the dollar is concerned.
I'm basing this by looking at what happened the last time markets went thru a major re-pricing because of Trumprisk which was election night 2016, the short version of which was that after a very brief steep dive the dollar got bought against virtually all currencies for weeks.
So this time I would say the opposite is most likely to happen, with most of that going into euro and yen.
Anyone else have an opinion?