We do not expect prolonged dollar damage from the gloomy report mainly because the recent dollar strength is NOT a result of improved US fundamentals but of worsening conditions abroad. Poor US jobs data neither alters the reality of economic conditions overseas nor the performance of EUR, GBP, AUD and NZD. Since currency dynamics thrive on relative economic valuation, the rapid deterioration in European and antipodean fundamentals offer plenty for such relative assessment.The currency consequences mean continued USD strength against GBP, EUR, NZD and AUD, but NOT against the JPY. The 3% decline in US equities and resulting sell-off in global markets reflected the reality that no economy is immune from the global economic slump, prompting further unwinding from dollar shorts and yen longs.Ashraf Laidi - Incisive Global Markets Analysis
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