Analysts pointed out that as long as the dollar continues to rise against other currencies, it will be difficult for the global stock and bond market to stabilize.


[Compile Lu Yongshan/Comprehensive Report] Due to the strong interest rate hike by the US Federal Reserve (Fed), the international dollar index recently rose to its highest level in two decades, triggering global financial market turmoil; analysts pointed out that as long as the US dollar continues to rise against other currencies, the global It is difficult for the stock and bond market to stop falling and stabilize.

Nicholas Colas, co-founder of DataTrek Research, said that currencies need to stabilize before global stock markets can bottom; looking back, a strong dollar has been a fundamental source of market turmoil since the early 2000s.

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As the dollar continues to strengthen, investors are selling risky assets and looking for safe havens due to fears of a global recession; another reason for the dollar's surge comes from carry trades, as investors borrow low-yielding currencies such as the yen and convert them High-yielding currencies such as the U.S. dollar in exchange for higher returns.

Spectra Markets President Brent Donnelly said that as the Fed became more hawkish, fixed-income bond and U.S. Treasury yields rose rapidly, attracting funds to the United States; rising Treasury yields also made investors nervous, so they sold stocks for safety. Buy dollars.

Analysts pointed out that if the Fed stops tightening monetary policy, it may slow the dollar's rise, but as U.S. inflation continues to rise, the Fed is determined to combat inflation, which seems to be a distant prospect.

Macrolens head Brian McCarthy said a stronger dollar was bad for global risk assets, including those in the U.S., and that was putting enormous pressure on dollar debtors around the world, especially those in emerging markets.

Citigroup strategists Jamie Fahy and Adam Pickett recently released a report that the market value of global stock markets has evaporated by $23 trillion this year. Due to the inverse relationship with risk assets, the dollar has become the only safe haven for the rest of the year. risk tool options.

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