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Strategy Report

The U.S. Dollar Shortage And Brewing Exchange Rate Volatility

by Arthur Budaghyan, Chief EM/China Strategist  

Rising demand for U.S. dollars in EM and further yen depreciation, if it transpires, assures global exchange rate volatility will rise. Rising currency volatility, especially in the RMB, will push the global risk premium higher, weighing on global share prices. In Turkey, a wage-inflation spiral is unfolding and the central bank is behind the curve; the currency will plummet further.

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