Friday, August 21, 2020

The rush to liquidity is over

King dollar's decline ripples across the globe
The U.S. dollar index =USD, which measures the greenback against six other major currencies, is down around 9% from its March highs and is on track for its worst month since 2011, pressured in part by expectations that the United States will take a bigger hit to growth than other economies from the coronavirus pandemic.

The liquidity rush happens during sudden crashes, but dissipates in about one quarter.  The dollar is now back to trend.  How in the world did investors come to the conclusion that the temporary rise was permanent? 

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