The world economic recovery may be slowing more rapidly than previously expected, according to the Organization for Economic Cooperation and Development. They suspect a further slowing of global growth would be beneficial to the dollar, even though the US is leading the slowdown, says David Woo, head of global rates and currency research at Bank of America Merrill Lynch. The past summer brought some remarkable developments in financial markets, says Michael Woolfolk, senior currency strategist at BNY Mellon, based in New York. While they avoided a renewed outbreak of crisis in Europe, disappointing economic data in the US and abroad have weighed on global equities, Woolfolk says. Market participants sought safety in the US treasury market, pushing the 10-year yield below 2.5%. Unfortunately, credit markets remained impaired, as banks chose to borrow at effectively zero interest rates and invest in US treasuries, rather than create new loans to stimulate the economy' he says.
Pages to are hidden for
"Global Economic Slowdown Could Prove Beneficial To Countercyclical Dollar"Please download to view full document