RE: Lloyds18 Jun 2021 18:11
Historically, every time post G7 meeting the USD strengthens. This is due to the fact that they all believe in a strong dollar policy to adjust their imbalances. Additionally, Powell spinned off the idea of raising interest rates in 30 months time.
In my opinion they have induced a correction in the market.
The strength of the USD is temporary and the DXY should top out at 92.50 before heading lower towards 82.50.
Globally, none of the Govt' can repay the debt created in the last 24 months. You can only reduce the impact of the debt by higher inflation which could be induced by QE or by economic growth.
The global economy is in vicious cycle and you cannot:
- increase interest rates and kill off any anemic growth.
- reduce QE and kill off any excess money based inflation
- increase taxes but would have impact on the business sustainability
Globally, every country wants to devalue their currency which includes USA. However, like everything in life they all need something to devalue against which is USD.