cryptocurrency general

More and more countries (EU included) seek to mitigate risk of dollar dependency

Morgan Stanley | Crypto analyst Sheena Shah reviews the digital currency initiatives that central banks (CBDCs) are starting to put forward as an alternative to the use of cryptos. The use of cryptocurrencies for everyday payments is complex and expensive for the consumer and the ecosystem has not developed, except for in Switzerland. Companies such as Adyen have no plans to incorporate crypto payments into their offerings Their conclusions are…

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US bond holdings fall by $76bn in a week: they don’t want bonds, they want cash

Intermoney | First Citizens finally proceeded to buy SVB for $500 million, assuming $56 billion in deposits and $72 billion in loans. The estimated cost of SVB’s bankruptcy has been set at $20 billion, a loss borne by the FDIC and representing 15% of the fund’s total. Not surprisingly, just a year ago, SVB was worth $40 billion and was the 14th largest bank in the US. Just a month…

digital dollar

Will the dollar lose its exorbitant power to the Euro or the RMB? Not just yet

Alicia García Herrero (Natixis) | The US dollar has officially ruled the international monetary system since the Bretton Woods Agreement in 1944. No other currency has been able to challenge the dollar notwithstanding the ups and down of the US economy both in terms of growth but also inflation. Notwithstanding its overall dominance, things are changing. This is particularly true for the waning share of the US dollar in the…

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Can non-U.S. equities overcome a strong U.S. dollar?

Steve Caruthers & Steven Sperry (Capital Group) | There’s no denying that the relentless rise of the U.S. dollar has been challenging for investors in non-U.S. equities. The currency translation effect (that is, losses and gains resulting from the conversion of non-U.S. investment returns into U.S. dollars) has dented global equity portfolio results. There are two ways currency movements can affect investors. In addition to translation effects at the portfolio…

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The Dollar: From 71% To 59% Of Central Bank Reserves In 20 Years

Luis Alcaide | The world is gradually moving towards a multiple reserve system. In its latest World Economic Outlook, the IMF notes that when the euro made its appearance, the dollar accounted for 71% of foreign exchange reserves. In the last quarter of 2020, dollar reserves held by central banks had fallen to 59%, the lowest share in the last 25 years. The complaints in 1960 from the then French…

digital dollar

The Life Of A Digital Dollar

Alger (La Française AM) | With the rise of digital payments, the economics of credit and debit transactions has been a hot topic as investors try to figure out the best places to invest in the payment ecosystem. So where does your digital dollar go?


Why Does The US Benefit From A Dollar That Isn’t Tied To The Value Of A Glittery Hunk Of Metal?

Michael Klein via The Conversation | Going back to a gold standard would create new problems. For example, the price of gold moves around a lot. A year ago an ounce of gold cost $1,457. The pandemic helped drive up the price by 40% to $2,049 in August. As of Nov. 18, it was about $1,885. Clearly, it would be destabilizing if the dollar were pegged to gold when its prices swings wildly. Exchange rates between major currencies are typically much more stable

dollar rally

The Weak Dollar: Why It Won’t Be Replaced As Global Reserve Currency

Arturo Bris via The Conversation | Stock markets have been very strange this year. For international investors in general, currency risk – above all the weakening of the US dollar – has become the most important financial risk of the year. For a European investor, for example, US markets have yielded about 5% in US dollar terms) in the first eight months of 2020. Translated back into euros, however, that return is 0.5% because of the depreciation of the US dollar over the past two months. 


The US Dollar’s In The Spotlight

We enter the second half of the year with the cases of Covid-19 increasing uncontrollably on the American continent and in a very worrying way in the United States. The growing political uncertainty, accentuated by the trade conflict between US and China, puts the dollar in an unusual situation.Without falling into excessive pessimism, UBS AM Chief Strategist Evan Brown analyses in detail the current state of the currency and reveals his tactical positions given the current scenario.