Blokland’s daily sketch

Blokland’s daily sketch

23-10-2020 | Daily sketch

Is the US dollar bear market upon us?

  • Jeroen Blokland
    Portfolio Manager

The US will record massive budget deficits this year and next. Today’s chart shows that, while being far from a perfect relationship, the US Dollar Index tends to drop when the US budget deficit rises. With the trade deficit also up to the highest level since 2006 and flushing the world with dollars, this could create the right conditions for a new long-term bear market in the US dollar. The question is, however, if this will start any time soon. This would require a shift in demand for US dollars, due to, for example, a more sustainable global economic recovery and ongoing loose financial conditions. Issues surrounding US debt sustainability could in theory also be a reason. But I think this is unlikely, especially now that the yields on US Treasuries are becoming more attractive relative to other safe havens. Hence, the conditions for a weaker US dollar are in place, but we need a catalyst to start the process of adjustment.

Now also follow us on Instagram
Now also follow us on Instagram

As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.


当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。




商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号

加入協会: 一般社団法人 日本投資顧問業協会