US$

[Viking]

What are people thinking will happen to the US$ moving forward (next year to two years)?

 

Will we get a flight to safety where the US$ will strengthen?

 

Is the plunge in the 10 year telegraphing anything for the US economy and the US$?

 

The US$ has outperformed for so long will we now start to a change and a period of underperformance start.

 

I am not trying to become a currency trader. But i do like to think about currency as an input into the decision of which where (regions) to invest.

[TwoCitiesCapital]

This is very generalized, but the USD has tended to 'smile' going into recent downturns.

 

Having higher interest rates and being a cleaner dirty shirt has typically meant the currency starts off elevated at the beginning of any slowdown.

 

Then, as Fed cuts rates (or stops raising them) we lose our interest rate advantage and people realize US is not immune to growth concerns and the dollar depreciates relative to other assets.

 

It then appreciates again following it's trough as the US has displayed it's ability to navigate the downturns in a reliably smooth manner and begins hiking rates and removing accommodation.

 

Can't say it will play out the same this time around but it seems like we started off elevated and have started to give some of that back - at least relative to the euro - suggesting the first two steps have been correct so far.