Volatile Currencies To Return In 2023

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King Dollar Unseated and China’s Yuan Rebels: Currency Volatility Comes Back in 2023

 

A stronger US dollar has been a feature of the 2022 bear market in risk assets. US monetary tightness and a rush of foreign capital into US safe havens have lifted the US unit. 2023 will likely see a reversal of both drivers as policy-makers clamber to underpin fragile sovereign debt markets with liquidity and so trigger a 15-20% correction in the US dollar. Yet, this fall may hide more worrying developments in China, where we figure there is potential for a larger fall in the Yuan. All-in, currency volatility is back.

 

 

 

See our latest published research, Global View: King Dollar Unseated and China’s Yuan Rebels: Currency Volatility Comes Back in 2023 – December 2022

 

 

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