Report
What is the outlook for the dollar’s exchange rate?
One mechanism that could lead to a depreciation of the dollar is the United States' growing external deficit and its rapid accumulation of external debt. But this mechanism is now outweighed by: The size of bond capital flows heading to the United States while leaving the euro zone; The prospect of a significantly earlier exit from expansionary monetary policy in the United States than in the euro zone; The attractiveness of the US equity market. When risk aversion rises, as it has recently, US equities are less attractive, but US bonds become more attractive. The US external debt could lead to a depreciation of the dollar only if: The ECB also announced an exit from its highly expansionary monetary policy; The European bond market became more attractive, which was the case from 2002 to 2007.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.