US Treasury Sec. Yellen faces ‘currency war’ redux as she ditches a strong dollar – Bloomberg

Anil Panchal FXStreet

In its latest analytical piece, Bloomberg cites tensions over foreign-exchange intervention as an additional challenge for US Treasury Secretary Janet Yellen. “Treasury Secretary Janet Yellen faces one more headache on an agenda packed with everything from Covid-19 relief to addressing inequality and overhauling tax policy,” said the report.

The analysis mentions a 13% drop in the US dollar value from March top while conveying Treasury Secretary Yellen’s odd place amid Democratic administration that likely backs strong dollar.

Research from Deutsche Bank’s chief international strategist Alan Ruskin could also be found in the article that said, “What we are seeing is only the opening gambit of central banks responding to a weaker dollar environment.” Mr. Ruskin also said this is something for the market and the Biden administration to watch closely.

FX implications

The currency war saga is likely to weigh on global risks and may help the traditional risk-safety measures like gold. However, the coronavirus woes haven’t faded and hence the economy is less expected to concentrate on the currency war any time soon. As a result, the bulls run for gold, currently up 0.14% intraday around $1,845, is far from now.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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