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Cool Video: Bearish Case for Euro and Prospect of Currency Wars


Cool Video: Bearish Case for Euro and Prospect of Currency Wars

Still in London as this part of the business trip is winding down.  I had the privilege of going over to the Bloomberg office today and spoke with Vonnie Quinn and Mark Burton about the euro’s outlook and whether the US should have a strong or weak dollar.
I sketch out my idea that the (upside) correction in the euro began in mid-December around following the Fed’s hike.  Over the last couple weeks, I have been discussing in my posts the idea that the dollar has been carving out a bottom, and the euro now is off almost two cents from last week’s highs.  The turn may have already happened.
Vonnie asked me about what I have called the $16 trillion question:  Whether it is better for the US to have a strong or weak dollar?   In the previous post I discuss this, so my answer was a confident yes.  I explain what I meant was that given the circumstances and the recent history, the US is best off setting the standard for others, and according to agreements at the G7 and G20, by accepting the level that is determined by the market.
A key outcome of this is that it is a form of arms control.  Major countries have agreed not to seek trade or financial advantage by having a foreign exchange target.  Countries are still free to pursue the monetary and fiscal polices to address domestic economic consideration.
Click here to watch the three minute video. 

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Marc Chandler
He is Global Head of Currency Strategy of Brown Brothers Harriman (BBH). He has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. He regularly appears on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. BBH provides specialist services and innovative solutions to many Swiss asset managers that include a global custody network of close to 100 markets, accounting, administration, securities lending, foreign exchange, cash management and brokerage services. Feel free to contact the Zurich office of BBH
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