Capital Quits The Dollar

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Global Capital Is Quitting The Dollar

 

Evidence from capital flows indicates a sharp slowing and signs of a reversal in capital flows into the US dollar. Capital is swinging towards Europe and at the same time capital outflows from Asia are stabilizing. These outflows do not represent a loss of confidence in US economic prospects. Rather they reflect the changing supply conditions: both the increased supply of dollars printed by the US Fed and the step-up in European ‘safe’ asset supply, as part of the COVID response, as well as the likely slowdown of capital flows from China into US assets following the renewed ‘capital war’. Our conclusion is that at least a 10% and may be a 20% fall in the US dollar is possible.

 

 

 

See our latest published research, Global View - Global Capital Is Quitting The Dollar - August 2020

 

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