This kind of’s not just stocks that will are falling.
Despite a selloff within the stocks, the U.S. dollar, traditionally a haven in times of turmoil, is usually hovering near multi-year lows. This kind of could see even more downside This kind of year For two main major reasons: Europe in addition to China. The DXY U.S. dollar index ended January with losses of 3 percent, its worst drop in nearly 2 years, in addition to its third straight month in negative territory.
For all the stimulus through tax cuts, the growth within the U.S. economy is usually still on par with Europe’s. As the global economy continues to grow, This kind of will only put more pressure on the greenback, one respected currency expert explained to CNBC recently.
“The dollar weakness carries a lot to do with the fact that will we have strength within the global economy,” Jens Nordvig, founder of Exante Data, told CNBC’s “Futures at This kind of point” This kind of week.
The U.S. is usually likely to print a growth rate of 2.7 percent within the first quarter as tax cuts begin to work their way through the economy. Yet Europe has already seen GDP of 2.5% “without any fiscal stimulus,” Nordvig said.
The euro has gained ground against the U.S. dollar within the year to date, a trend Nordvig likely to continue. After recent moves, Nordvig sees risks for the euro/dollar exchange rate as skewed to the upside, in addition to believes a move within the currency as high as 1.28 is usually realistic. Europe’s single currency closed on Friday trading near $1.24.
Nordvig added that will “dips should be used to add long exposure.”
The eurozone’s currency picked up gains through January in addition to hit 1.25 against the U.S. dollar on Jan. 25, a level not seen since the end of 2014. The currency rose nearly 4 percent in January, its biggest one-month move since March 2016.
The single currency had rallied that will month after European Central Bank President Mario Draghi said he did not expect to cut interest rates any further, marking the final time the ECB cut its rates This kind of cycle.