dollar emerging markets

Heisenberg Nightcap (Dollar Edition)

I've written volumes lately about the soaring dollar and the worsening global USD funding shortage. Here's a bit more...

I've written volumes lately about the soaring dollar and the worsening global USD funding shortage . On the heels of Donald Trump's election, the broad dollar has soared to a 14-year high. This comes just nine months after the so-called "Shanghai Accord", a tacit agreement between the world's foremost monetary authorities who decided in February that a weaker dollar (at least in the short-term) would help markets find their footing after renewed deflation fears and China jitters combined to throw investors for a loop in January. The Fed subsequently leaned dovish in March, the dollar softened a bit allowing for a more orderly devaluation of the RMB, and before long, things had calmed down considerably. Well as summer turned to fall, the greenback began to gain some momentum. Then we got Trump. And a sharp repricing of yields. And a more hawkish outlook from the Fed. Now here we sit: Here's what Goldman had to say late last month: Our longstanding view has been that divergence in the activity and inflation outlook would drive rate differentials in favor of the Dollar, and that the focus would shift away from ECB and BoJ easing to Fed tightening. The US Presidential elections
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