Global ‘Dash For Dollars’ Turns Acute
Global dollar demand is evident.
Last Sunday, I suggested the Fed's dollar swap announcement+, made in conjunction with the parties to the standing arrangements, betrayed central bank concerns about dollar-funding stress amid a flurry of panicked efforts to extinguish fires in the banking sector.
Although swap line utilization looked tame, the "dash for dollars" (if you like) showed up in the first large FIMA draw since the facility was established and the second-largest liquidation of Treasur
Doesn’t the global haven seeking into dollars combined with the highest Treasury yields “since forever” (and way better than most developed countries) mean a really strong dollar?
A strong dollar might slightly ameliorate the US consumer driven inflation (and price of oil) but at the cost of exporting inflation?
(ironically creating more utility for international players to demand more dollars)