Tag Archives: USD - 6 posts found

Stronger Dollar Toxic for Emerging Markets

In the past few monthlies we’ve warned that a strong dollar has the potential to cause emerging market crises.  From a valuation standpoint, the dollar is very overvalued against almost all currencies, but rising interest rates and the appreciating momentum…


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Greatest Risk to EM is a Higher Dollar

(from our Tactical report of 8th November 2016) Flows to EM equities have been high lately (3m flows over last 2 years to EM ETFs are in their 80th percentile – chart below). Source: Macrobond, Bloomberg and Variant Perception The…


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USD to Continue Weakening Bias as Risk Recedes

Brexit predictably caused the USD to rally, as any global risk-off episode will do.  However, we reiterate our view that the USD will have a tendency to weaken, after the current rally dies out (which it already appears to be…


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USD Positioning Supports Weaker Dollar

In January and February we discussed our view that we thought the dollar would find it difficult to rally further and would instead display a modest weakening bias.  The initial leg up of the rally in 2014 was not due…


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EM Capital Outflows Gather Pace

We discussed in April that global reserve assets had begun to fall on an annual basis.  This has continued, and the level of contraction is now as great as it has been since at least 2004. Capital flight from EM…


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Warning shot across the bow for long USD speculators

One of the points that we have emphasized to clients in our most recent reports has been the risk of a reversal in the USD. Fundamentally, the USD looks better than most, but nothing goes up in a straight line and speculators have been complacently long.


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