Courtesy of Read the Ticker
The short term US Dollar cycle peak is upon us, it is time for capital flows to rule the direction of the DXY.
Previous Post: US Dollar Short Term Cycle Peak Near
Capital flows and interest rate differentials move currency around.
If capital flows take over, then they DXY is going into the 80's at least. Of course hiking rates 4 times is easier on the world when the DXY is near 80 rather than 95. A lot if US debt held by emerging markets is at risk otherwise. And yes a lower US dollar in early 2022 helps China out, as it supports world demand, and in late 2022 Chinese stimulus is expected. Nice!
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The US dollar cycle is rolling over in the short term.
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Some people do not want the US dollar to fall as it has been great to be long the US Dollar trades. JP Morgan Jamie Dimon says he could see 6 to 7 rate hikes in 2022. Of course silver shorts unwinding will not be great for the Bank of America and/or JP Morgan. There are too many open trades requiring the US dollar to stay trending higher. Oops, looks like a leadership change is about to occur in 2022.
This sector is worth watching.
2022 is going to be fun!
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