weak-dollar-is-good-for-greater-china-markets

Weak dollar is good for Greater China markets

A lack of reserve currency alternatives means there won't be a dollar crisis, but the greenback could stay weak throughout 2010 creating profitable trading opportunities.

While the Federal Reserve left US interest rates unchanged last night, the market has recently started to expect that a rate hike will come sooner than initially anticipated, leading to expectations of a near-term rebound in the US dollar exchange rate. If memory serves me correctly, a similar shift in interest rate expectations in 2004 heralded the dollar rally in 2005. However, we are facing a totally different situation today than in 200405. In my view, the dollar may have entered a cyclical downtrend from a medium-term perspective and its weakness may last through 2010, if not longer.

Crucially, the dollar's expected depreciation may follow a rotational pattern instead of...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222