‘Not terrible’ reading about Goldman Sachs’ King Dollar – And even if you’re from the ‘always do the opposite of GS’ persuasion, you must at least know what they are doing!!
The US dollar is rolling. Even as the US economy shows signs of cooling, the greenback has soared against major currencies from Europe’s 19-member euro to China’s renminbi. An index of the dollar against other major currencies is trading around a two-decade high.
Investment tends to flow into higher-yielding currencies, and the greenback has rallied in part because the Federal Reserve is raising interest rates more aggressively than some other central banks as it aims to contain inflation, according to Kamakshya Trivedi, head of Global Foreign Exchange, Interest. Rates and Emerging Markets Strategy Research. The dollar, which is seen as a safe haven during turmoil, also rose as concerns grow that the shock in energy prices will halt economic growth in many parts of the world.
But Trivedi says there are signs the dollar’s rise is in its “later entries” as it nears extreme levels against currencies such as the Japanese yen or the British pound, which has traded at its weakest level against the greenback dollar since Margaret Thatcher was the UK. prime minister We spoke with Trivedi about the risks to emerging currencies of the dollar and his outlook for the world’s reserve currency.