it seems to be a circular problem as the higher rates add to the dollar's strength and the dollar's strength reduces liquidity and drives yields higher. having been involved in FX markets for > 40 years, i have seen this movie before in the mid-1980's leading to Louvre and Plaza agreements. I suspect we may see similar issues yet again
Yes, Andy, interesting point - and a continuing reason to be attentive to the dollar's exorbitant privilege (the financial fact, as well as the blog!).
it seems to be a circular problem as the higher rates add to the dollar's strength and the dollar's strength reduces liquidity and drives yields higher. having been involved in FX markets for > 40 years, i have seen this movie before in the mid-1980's leading to Louvre and Plaza agreements. I suspect we may see similar issues yet again
Yes, Andy, interesting point - and a continuing reason to be attentive to the dollar's exorbitant privilege (the financial fact, as well as the blog!).