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USD: where to?

Regarding the future evolution of the USD, a comparison is always made with the previous cycle of monetary restrictions in the USA (2204-2006). Then, the USD depreciated. So, why would it appreciate after the first increase of the key debt which will be delivered by Fed on Thursday or in a couple of weeks/ months?

Still, the contexts are hugely different. A decade ago, China was registering double-digit economic growth rates. Emerging economies, at their turn, were in favour with the investors. Many important central banks were increasing key debts, not just Fed. And the USD depreciation had already become a structural trend when Fed took off in the summer of 2004 from a key debt of only 1%, a record minimum back then.

 

For more information, please see the Romanian version of the article, here.

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TRADEVILLE SA
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