Read on Twitter
Hedge funds and other speculators are holding over $35 billion in net short positions, betting against further declines in the US Dollar.
Often, that has led to a short squeeze and a rise in the exchange rate; and often a $USD rally is negative for risk assets (stocks).
Often, that has led to a short squeeze and a rise in the exchange rate; and often a $USD rally is negative for risk assets (stocks).
The majority of the short positions are skewed in three currencies, though.
The Euro, Japanese Yen, and New Zealand Kiwi Dollar.
The Euro, Japanese Yen, and New Zealand Kiwi Dollar.
Have we seen a regime change (change in trend) for the USD?
If true this will have a major impact on various asset classes & regional economic growth in the world.
History shows during $USD downtrend lead to European real estate + Emerging Markets & Asian stocks outperformance.
If true this will have a major impact on various asset classes & regional economic growth in the world.
History shows during $USD downtrend lead to European real estate + Emerging Markets & Asian stocks outperformance.
If the regime is changing, and if the $USD is entering a prolonged downtrend period,
large net short positions by hedge funds have less importance and oversold price levels can become even more oversold as momentum takes over.
1985-87 and 2001-03 are great examples of this.
large net short positions by hedge funds have less importance and oversold price levels can become even more oversold as momentum takes over.
1985-87 and 2001-03 are great examples of this.
Brazilian Real, typically a weaker Emerging Market currency, continues in its downtrend against the $USD...
...while Czech Krona, typically a stronger Emerging Market currency, is now breaking out of its downtrend against the $USD.
We aren't going to be investing in Brazil, for a variety of reasons.
But we do continue to invest in Czech Republic (Prague).
But we do continue to invest in Czech Republic (Prague).
