#2015: The year of #dollar danger for the #world! wp.me/p1xXtb-49F via @truthrazor We are entering a new financial order where there is no longer an automatic “Fed Put” or a “Poliburo Put” to act as a safety net for asset markets. America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015. Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity. Yields on 2-year US Treasuries have surged from 0.31pc to 0.74pc since October, and this is the driver of currency markets. Since the New Year ritual of predictions is a time to throw darts, here we go: the dollar will hit $1.08 against the euro before 2015 is out, and 100 on the dollar index (DXY). Sterling will buckle to $1.30 as a hung Parliament prompts global funds to ask why they are lending so freely to a country with a current account deficit reaching 6pc of GDP.
Posted on: Thu, 01 Jan 2015 16:08:59 +0000
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