Is world intervention on the playing cards to weaken the US Greenback? Economists at Nordea don’t assume so and see an excellent stronger USD forward.
Uncoordinated FX intervention is not going to cease the USD rally
“The FX intervention whereby international locations are actively intervening to prop up their currencies towards the USD might dampen the strengthening of the USD within the brief to medium-term. However international locations wouldn’t have an countless quantity of USD at disposal to promote, that means that the FX intervention will fail when their USD coffers run dry.”
“FX intervention entails promoting of US Treasuries, which provides upwards strain on US charges and results in a stronger USD in isolation. This FX intervention USD doom-loop may result in greenback overshooting – particularly when a number of central banks are implementing the loop.”