BofA argues that CHF is now behaving more like gold:
A liquid, neutral hedge against long-term fiscal uncertainty in a world that doesn't have many G10 alternatives, not short-term market stress. Source: Patrick Saner
BREAKING: U.S. Dollar
U.S. dollar Index $DXY is now trading below its 200 Day Moving Average by the largest margin in 21 years. Source: Bloomberg
Does this chart signal a breakdown in the dollar, or is it preparing the ground for one of the most violent reversals in recent history?
$DXY is testing the lower bound of a multi-decade ascending channel, a level that has repeatedly marked inflection. Source: barchart
The swissie has appreciated nearly 50% over the last 20 years.
A stronger CHF poses significant challenges for Swiss firms, particularly exporters, as it erodes their pricing power on the global stage. This could pressure corporate margins and economic growth in Switzerland. Note that the August 2011 high at 1.3125 is not too far away. What will the SNB do in case of breakout? Heavy use of its balance sheet (at the risk of being pointed out by Trump as a currency manipulator) and/or negative interest rates?
Don't forget, FX effect is a very important component in total returns...
As highlighted by Jeroen Blokland, while the SP500 Index is close to a record high in US dollar terms, in euro, the index is down 11% from its peak in February. The euro has reached its highest level since September 2021, which hurts euro-denominated investors. Source: Jeroen Blokland, Bloomberg
The Dollar posted its steepest first-half decline in over five decades, as erratic policy shifts and signs of slowing economic activity continue to erode confidence in the reserve currency.
The Dollar Index DXY Index fell 10.8% in H1 2025 as the Dollar weakened sharply against major developed-market currencies. The Greenback tumbled 14.4% against the Swiss franc, 13.8% against the Euro and 9.7% versus the Pound. Emerging-market currencies also rallied, delivering some of their strongest gains in years. (BBG) Source: HolgerZ, Bloomberg
The Hong Kong Monetary Authority said it used HK$9.4bn ($1.2bn) of its reserves to buy Hong Kong dollars on the open market.
It acted after the local currency dropped past HK$7.85 per US dollar, the weak end of the band within which it is allowed to trade. The move will drain liquidity from the banking system and pushed up interbank lending rates on Thursday, potentially threatening a carry trade that has allowed investors to borrow cheaply in the city’s currency before investing in higher-yielding US debt securities. Source: FT https://lnkd.in/evksjsp9
BREAKING 🚨: U.S. Dollar
The lowest close since March 2022 for the U.S. Dollar Index $DXY on track its 📉📉 Source: Barchart
