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Deutsche with the call.
The dollar on Friday experienced its largest two day drop since 2008. Is the move justified? Yes. Would we fade it? No.
We have written before that the most important driver of the dollar this year ha sbeen a rising global safe haven premium on multiple fronts. The Fed’s relentless push towards tightening and fears of US hard landing; China’s uncompromising pursuit of zero COVID and continued downgrade of growth expectations; the persistent negative newsflow around the Russia–Ukraine war, including the risk of the use of unconventional weapons. Over Thursday and Friday, we had material information on all three risks.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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