Source: Fortune
Summary
The US dollar has been declining despite a growing economy and declining inflation. The dollar has lost 9.4% of its value over the last 12 months and is down 8% against the British pound. Equity traders agree with currency traders, as the Stoxx Europe 600 is up nearly 4% year-to-date, while the S&P 500 is down 0.14%. Analysts attribute the decline to rising unemployment and weak hiring, which may lead to the Federal Reserve delivering new rounds of cheaper money to boost the economy.
Our Reading
The numbers tell one story.
The dollar’s decline is a result of the “Sell America” trade, which remains in effect. The US economy’s growth is not enough to bring the dollar back to early January levels. The prospect of dollar assets paying less interest in the future is keeping traders away. The dollar has lost its safe-haven value, and confidence hasn’t returned. The “Sell America” episode is leaving lasting damage on the greenback.
The US dollar is down, and it’s not just a minor correction.
Author: Evan Null
