Making sense of the markets

I suspect the rally of the dollar is not due to expectation of growth under Trump.
It’s just that most of the world’s finance works in dollars.
So, it’s what uncertainty does: not having any idea on what will happen, asset managers try at least to minimize exchange rate risk -by repatriating assets.
Confirmed by the fact that the Sterling is the other currency gaining strength, despite the lack of progress on how the actual future of Britain will look like -but the currency it is the other master of finance markets, and people who have to repay pounds to investors will prefer to hold pounds.
 
It explains the fall in bonds across the board in Europe (including Germany). It’s not increased risk of default or inflation: it’s just Americans selling.
Which, by the way, would make European bonds an attractive investment for people who think in Euro instead.
But of course, what The Donald said, what he actually wants, what his own Republicans will allow him to do, and what is actually possible in reality, are different planets alien to each other for now. Until the dust of their collision settles down, literally everything is a huge risk.
Just make sure to remember where your towel is, and don’t panic -too much.
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