Read full post at forexlive.com
The world is facing a dollar confidence crisis as the
repercussions of “Liberation Day” continue to reverberate, Deutsche Bank says.
The German bank is out with its latest forecasts for the US economy and is increasingly tilting towards a stagflationary scenario.
Deutsche Bank writes:
This potentially marks the largest shock to the
world’s financial and trading system since the collapse of Bretton Woods in
1971. Although Trump’s 90-day tariff reprieve and subsequent exceptions have
lessened the impact, much damage has already been done thanks to extreme levels
of uncertainty around the credibility and direction of policymaking. The US’s
exorbitant privilege of being able to comfortably fund its twin deficits is
perhaps the largest consequence of recent events, and may ultimately determine
how far the US administration is able to continue this policy.
I worry that we are underestimating supply chain impacts from a China-US decoupling and launching a repeat of covid-style inflation.
In terms of FX, Deutsche Bank sees EUR/USD rising to 1.15 by year end.
This article was written by Adam Button at www.forexlive.com.
Read full post at forexlive.com
The world is facing a dollar confidence crisis as the
repercussions of “Liberation Day” continue to reverberate, Deutsche Bank says.
The German bank is out with its latest forecasts for the US economy and is increasingly tilting towards a stagflationary scenario.
Deutsche Bank writes:
This potentially marks the largest shock to the
world’s financial and trading system since the collapse of Bretton Woods in
1971. Although Trump’s 90-day tariff reprieve and subsequent exceptions have
lessened the impact, much damage has already been done thanks to extreme levels
of uncertainty around the credibility and direction of policymaking. The US’s
exorbitant privilege of being able to comfortably fund its twin deficits is
perhaps the largest consequence of recent events, and may ultimately determine
how far the US administration is able to continue this policy.
I worry that we are underestimating supply chain impacts from a China-US decoupling and launching a repeat of covid-style inflation.
In terms of FX, Deutsche Bank sees EUR/USD rising to 1.15 by year end.
This article was written by Adam Button at www.forexlive.com.
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