Sticking to regime change; dollar uptrend
2013 marked a fundamental regime change from the
crisis-prone 2008-2012 period. The dollar’s correlation
to equities flipped, the euro-area avoided a crisis and
the Fed announced a rolling back, rather than an
expansion, of QE. If there was a locus of crisis it was in
emerging markets, which felt the shock of Fed taper.
This could hint that the 1990s dynamic of first half
dollar weakness and developed market crises and
second half dollar strength and emerging market crises
could be repeating itself.
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