Could a rising dollar throw emerging markets and commodities off course?
Higher long-term bond yields are usually supportive of the US dollar
Higher long-term bond yields are usually supportive of the US dollar
The Volatility Index (Vix) has risen to its highest level since August, following a frenetic overnight sell-off in the bond and stock markets.
The prospect of a US government shutdown has seen the pound climb to its highest level against the dollar since Brexit, while cryptocurrency Bitcoin continues to decline.
The dollar weakness we’ve seen this year took most investors by surprise. There are, however, obvious reasons for this, and fundamentals suggest it could reverse.
Financial markets were buoyed by Emmanuel Macron’s victory in the French presidential election, as the euro soared against the greenback.
The week kicks off with BT in hot water, a Trump-fuelled fall in the FTSE 100 and a redemption moment for sterling.
The Federal Reserve’s decision to leave rates on hold last night surprised nobody, but according to Kames Capital’s Scott Jamieson it suggests investors may be wrong to assume a rate rise cycle is imminent.
The US dollar has been rallying ever since mid-2014 and has had a further rise since President-elect Donald Trump won the election. What is driving this rally? Should we expect it to go further?
PA asked managers their thoughts on the big issues facing investors in 2017.
The dollar surged this morning on the back of only the second Fed rate rise since the 2008 financial crisis.
The dollar has rallied in recent days as investors believe stronger US GDP growth and Fed rate hikes will push the greenback up. But markets are ignoring the forces that are likely to drag the dollar down in the longer term.
As Donald Trump’s win in the presidential election became inevitable overnight, the dollar fell against other major currencies but this was quickly reversed following his conciliatory victory speech.