Source: Bloomberg
Author: Alice Atkins, Carter Johnson
The US dollar bull market market may have been broken last week.
The dollar has fallen in the largest week since November, and many strategists and investors said that this time the world's main reserve currency is finally reaching the turning point.If this is true, it will have a profound impact on the global economy and financial markets.
With the cooling down of the United States, the market will soon stop the Fed's expected increase in interest rate hosted by the Fed, and the US dollar has hovered at the lowest level in more than a year.The US dollar short is farther, and it is believed that the US interest rate cuts are inevitable, and the market is generally expected to reduce interest rates at a certain current in 2024.
"We believe that the US dollar will enter a downward trend that lasted for many years. Part of the reason is that the Fed's tightening cycle will be transformed into a loose cycle. In addition, other central banks will also reduce interest rates, which will further lower the US dollar," Standard Chartered G-10 currency strategy strategy strategyDirector Steven Barrow pointed out in the report on Friday.
The Bloomberg US dollar index was basically the same as Asia on Monday. Last week, the index fell 2%, the largest single week since November 11.
The chain response caused by the long -term decline in the dollar will be obvious.The import costs of developing countries will be reduced to relieve inflation pressure.The reversal of the US dollar will also boost currency that has fallen for several months.To look at it widely, the US dollar soft will boost the export of US companies, but it is not conducive to the export of enterprises in Europe, Asia and other regions.
The Bloomberg US dollar index fell by 2%last week, which also promoted the price of commodity prices priced in the US dollar with oil and gold.
Many investors have waited for the US dollar downward trend for several months. This decline has been preparing for the wins of the yen and emerging market currencies from M & G Investments to UBS asset management companies.
"It is most likely that the dollar is still weak in the next few months," said Peter Vassallo, Manager of Paris Asset Management Fund.He bet on the Australian dollar, New Zealand dollar and Norwegian Cran.
