The stronger dollar and the higher Fed rates have reduced the emerging markets.
18 nov. 2018 at 11:28 TASR
Bratislava. Stronger dollar and higher hedge rates caused a fall in emerging markets in the third quarter. US dollar and US interest rates can only grow at a certain level.
If the US currency does not weaken, it means that the rule of the dollar is regarded as a global currency. This is what Saxo Bank's forex strategist, John Hardy said.
Control of the US dollar
Along with the stronger dollar and higher interest rates, the Turkish lira and Argentine peso suffered the most in the third quarter. The main driving force for this development is the US dollar.
"From the final stage of the US monetary policy cycle we come to a complete conclusion, which is faster than the market or the Fed is expected," Hardy said.
In the event that the US currency does not weaken, the dollar has denied the debt rejection phase. "First, the" dollar scratch "will end and intensify search for an alternative to the global menu, which has already begun," said Hardy.
Dollar is in danger yet
However, the global currency position of the dollar is not threatened by Tibor Lörincza, an economic analyst at Tatra Bank, in the short or medium term.
The global currency problem is not just the side of the transaction, in which currency is denominated in trade, but also that we can buy a particular menu, usually bonds and shares.
"Global currency should therefore allow free movement of capital, develop an advanced financial and capital market in a given currency, and the economy should be relatively large," Lörincz said.
Moreover, in the opinion of the global currency, it is predominantly a good repute as it is only slim and comfortable world-class investors.