July 04, 2024 at 02:34PM
Yesterday, I spoke with Kitco News in a great interview with Jeremy Szafron that focused on the US dollar and the macro outlook.
Some highlights:
Federal Reserve’s Strategy:
“I think in this instance it’s going to be especially damaging for the Federal Reserve because they…always fight the last war. They’re fighting inflation and the market is telling you right now that inflation is yesterday’s story.”
US Dollar Strength:
“In that sort of scenario, we have ongoing US dollar strength. The US is still the cleanest dirty shirt and all roads sort of lead back to it against most of the currency field as we enter a cyclical slowdown.”
Japanese Yen Intervention:
“It’s a bit of a panic situation in Japan…Their best strategy though is to buy time until the US cyclical slowdown becomes more clear.”
US Political Landscape Impact:
“We may have a big, big change here…They’re going to try to rally around Kamala Harris…We’re going to be in a tremendous amount of uncertainty…I think in terms of the US dollar itself, it’s a little bit more complicated.”
Gold as a Safe Haven:
“You know, if I back it out, I want to buy gold because China, Russia, Turkey, the Middle East are all buying gold, and India, and they will continue to…The chance of it going below $2,000 is I think pretty close to nil.”
Emerging Markets and Swiss Franc:
“In a cyclical slowdown you can’t be in emerging markets unfortunately…The Swiss franc though, in an environment of political uncertainty, is an incredible place.”
Europe’s Political and Economic Challenges:
“Europe just wants to regulate everything while America innovates and China duplicates…It’s tough to get bullish on Euro, on Europe, any part of Europe for the long term.”
This article was written by Adam Button at www.forexlive.com.
