Source: Bloomberg
Author: Ruth Carson, Nishant Kumar, Carter Johnson
Mark Nash once thought that the rise of the US dollar was already in the end.
That was at the end of 2022. The betting of his short bonds had rewarded the market with the Fed's interest rate hike operation. The fund that he was in Jupiter's asset management, like many other funds, for the next stage of the cycle of the cycle.Posterior the popular bet: As the Fed's tightening cycle is nearing the end, the funds that originally competed to chase interest rates will retreat, and the US dollar will fall.
As the dollar goes down, this situation seems to be staged at some point this year.However, in July, the situation quickly reversed.
The US economy ignores pessimistic expectations, while China's economic growth has slowed down, and the global economic cracks have continued to expand. This has promoted the rise of the US dollar. In the past two months, the US dollar against almost every major currency rose sharply.
This accident of the dollar is echoing globally.Investors are now busy with liquidation.Chinese and Japanese officials are taking action to protect their currencies.American companies are facing the risk of impact on profits.In the entire development world, it evoked the painful memories of 2022. At that time, the US dollar brought economic impact by pushing up the price of commodities in the global market and intensifying foreign debt.
"The dollar has become a beast again," Nash said.He gave up the position of the short US dollar in the middle of this year.
The dollar rebound is another example, showing the unexpected toughness of the US economy and the continuous inflation that has followed, how much bad injustice has suffered the market.At the end of 2022, most economists predict that the Fed may shift to a model against economic recession, reducing interest rates to start economic recovery.
However, the fact is that despite the signs of overseas economic growth, the United States has made great progress.This prompted investors to transfer funds to the United States, where interest rates are expected to continue to rise, and the stock market will be supported by this expected, that is, the Fed will gradually end the interest rate hike cycle, while the economy is safe.
All these factors have pushed the Bloomberg US dollar index from mid -July for eight weeks and returned to the high point this year.
As of now, the index is still lower than last year's peak.Compared with 2022, it was still inferior to 2022. Last year, the US dollar rose sharply and pushed up global inflation pressure, because it pushed the cost of pricing commodities such as oil dollars such as oil.
In view of the fact that there is no confidence to see the power that supports the recent rise, it will soon reverse, and analysts have abandoned the view of the US dollar.
Mediolanum International Fund's fixed income person, Charles Diebel, once believed that the US dollar was weakened in 2023, but turned to a neutral position before and after the year.
"If you pointed at me with a gun, I may still be biased towards the US dollar in the next 6-12 months," he said."But in the next three months, I don't believe it so much. It may be further strengthened."
