The U.S. Dollar fell to its lowest against the Swiss Franc and Euro, while the Canadian dollar and the Scandinavian currencies are also near year highs as well. If you read Bloomberg, you might think this has to do with a bullish equity market call as the dollar’s status as a safe haven is less needed.
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But, the facts don’t add up.
- Equity markets sold off globally last week.
- Gold is now above $1000 an ounce.
- Commodities are rallying against the dollar as are commodity currencies.
- The Chinese are trying to internationalise their own currency and talking of moving out of dollars
- Ken Rogoff and Joseph Stiglitz are among prominent economists talking the dollar down.
The downward move in the U.S. dollar has everything to do with a fundamental weakening of appetite for U.S. dollars and much less to do with safe haven status.