USD strength signals weakeness with other currencies
Mihir Kapadia, CEO and Founder, Sun Global Investments
The consequence of USD strength has been weakness in the Euro, GBP and Yen. The Euro continues to decline pushed lower by the Catalonian referendum, sparking fresh worries after the recently concluded German elections where Angela Merkel's conservative alliance lost significant ground. The Euro has been the best-performing developed market currency this year and is still up more than 10 per cent against the dollar in 2017.
The GBP is also fragile and has spent the last week steadily retracing the gains made in early and mid-September. The ruling Conservative party's conference has been perceived as introspective and defensive after a poor general election, and is taking place against a background of internal tensions over the direction of the Brexit negotiations and a weaker economy, and rising inflation which are threatening interest rate increases.