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This thread was started in response to the Analytic:
US Dollar Index 14-Year Chart
Daily chart of 14 years of cyclical developments in finance & politics
Ashraf
but if you assume BRICS do well and USA dont:
CA will fall = less dollar excesses to mop up
looking on a supply/demand basis if the dollar will sell off into BRICS currencies due to capital inflows away from the dollar then why would the dollar weaken against non-BRICS. Investors wont be buying the Euro or Pound directly.
you will get the same relationship if you plot S&P 500 (not as strong) so it has got to do with risk appetite for global stocks. but if you are assume MSCI emerging markets will not be as correlated to non-emerging markets like S&P going forward then thats a different story.
Ashraf
but you could say that the dollar index is an inverse relationship with the MSCI, S&P etc so what has the emerging markets got to do with anything? global indeces remain quite interlinked and move together in the same direction much of the time.
plus, how can you confirm we are in a secular bear?