Latest news with #AmericanDollar
Forbes
3 days ago
- Business
- Forbes
The End Of Privilege - Has The Dollar Peaked And Can The Euro Replace It
A bunch of American dollars banknotes (1$), US, circa 1985. (Photo by) In the last week, I have fielded questions from audiences in Frankfurt and Dublin on the net effect of Donald Trump's economic policies on investment portfolios. Such is the day to day rhythm of policy chaos that many investors likely overestimate the effect of Trump on markets, and the oddity is that as I write, US equity and bond markets are at roughly the same levels they traded at in March….though investor confidence has taken a battering. Indeed, the luxury of financial markets is that some of the risks that Trump has unleashed can be hedged, whereas it is harder for societies, economies, and the body politic to offset the implications of his behaviour on foreign direct investment flows and the quality of political debate for example. From an investment point of view, I term the net effect of Trump on portfolios as 'The End of Privilege' which is to say that the idea of US assets in general and the dollar in particular befitting from what Giscard d'Estaing had famously referred to as 'exorbitant privilege' is coming to a slow end. In concrete terms we can expect investors to question the role of US Treasuries as a safe haven, and for the dollar to slowly weaken (from a very expensive level) over time. The set of economic policies that Trump is pursuing are confusing and damaging to long term American growth and the fabric of its society (his 'big, beautiful' budget bill will disproportionately favour wealthy over poorer households). Moreover, any sense of accountability has been snuffed out and corruption is shamelessly creeping into public life (Evan Osnos' article in the New Yorker on this topic is excellent). In short, America risks taking on the economic traits of a badly run emerging economy (look at how the Turkish lira and bond market have performed in the past five years as an extreme comparison). To take the long view, Trump has decisively smashed the Bretton Woods system that had elevated the US financial system to be first amongst equals. The Bretton Woods conference was a tussle between Britain and America to shape the new world financial order and with it, bodies like the IMF. The US was very much the winner, and effectively the meeting formalised the transfer of 'world power' from Britain to the US, or as Keynes (Britain's chief negotiator) wrote to his mother 'In another year's time we shall have forfeited the claim we had staked out in the New World and in exchange this country will be mortgaged to America'. Keynes job was to negotiate a deal for Britain that would rescue it from 'losing face altogether and appearing to capitulate completely to dollar diplomacy.' From this point onwards, American financial dominance grew, manifested in the broad international use of its currency which has risen to a very particular place as the linchpin of the financial system. Indeed, one of the most important tenets of the twentieth-century world order and the rise of globalization has been the position of the dollar as the international reserve currency. The dollar has become so important to the financial system, that two economists (Pierre-Olivier Gourinchas and Hélène Rey) have taken the notion of 'exorbitant privilege' a step further in a relatively recent paper, and introduced the idea of 'exorbitant duty', which refers to the role that the dollar and US financial system play in times of crisis as the provider of a safe haven, even when those crises emanate from the US itself. Alarmingly, there is a section in the trump budget (sec. 899) that permits the administration to tax holders of US assets in certain circumstances, which can only erode confidence further. The question then is which assets and currencies stand to benefit from a less 'privileged dollar'. First, my sense is that when something goes wrong in emerging countries like Turkey, capital flows to countries like Switzerland (simply because much of it is held by a small number of individuals). As far as much greater institutional flows are concerned, the obvious destination should be the euro-zone. But, this is not the case. At the end of 2024, I spent a week in Singapore and also the UAE and was surprised by the number of investors who considered the euro-zone as barely investable, this might reflect some ignorance on their part, but it is also redolent of a greater problem of international credibility for the euro-zone. In that context I was interested to see that Christine Lagarde, the president of the ECB gave a very good speech on currencies in Berlin on Monday 26th, entitled 'Earning Influence – lessons from the history of international currencies'. In the speech she noted three properties of dominant currencies – they are issued by large economies (zones), they have deep pools of financial assets which foreigners can buy and they are backed by sound legal systems. There are two important contemporaneous facets to the speech – the first is the expectation that the actions of the Trump administration will structurally weaken the dollar and the second is the very grown-up admission by the ECB president that the euro-zone (Bulgaria will become a member in 2026) has failed to deepen its capital markets and become the provider of safe assets in an increasingly unsafe world. The backdrop to these comments is a renewed push by the euro-zone on capital markets union, or the savings and investment union (SIU) as it is now called. In essence it has three components – single regulators across EU financial services, the creation of poles of expertise in different EU financial capitals (i.e. Amsterdam is the equity hub, Paris is where PE is, etc) and the sanctioning of retail savings and pensions flows into private assets. In many respects, SIU is a strange phenomenon – a policy critical to the future of Europe that most Europeans have very little attention span for (who would blame them). Apart from the releasing of hundreds of billions of euros in German savings banks for example, into private and private investments, what Europe also needs is a structural shift in the appetite for risk. For that to happen, we might need a European Donald Trump.
Bloomberg
16-05-2025
- Business
- Bloomberg
Wall Street Is Down on the Dollar as Trade Unease Lingers
In a week that saw an epic rally in US stocks and recession calls cast aside, currency traders are just as bearish as ever on the American dollar. Strategists at JPMorgan Chase & Co. and Deutsche Bank AG say the currency will keep weakening, and sentiment among options traders is the most negative in five years. The dollar index is still close to its April lows, evidence that investors are wary of returning despite the easing of China trade tensions that lifted other markets.
Forbes
23-04-2025
- Forbes
Why Spring Is A Great Time For Ski Travel
Lake Louise Ski Resort offers stunning views of Banff National Park. Snow-based recreation, such as skiing or snowboarding, is a tricky one for travelers. Every year, people book their winter ski trips far in advance—months or maybe even half a year—and then cross their fingers that the week they picked will turn up with good conditions. Or, at least, not horrible conditions. Ultimately, you get what you get, and you have to show up with a good attitude, and be thankful, I guess, for whatever you get. That's easy to say or to write, harder to do in practice, when you've invested significant resources into the trip. If you're truly a powder chaser, who will only enjoy the most epic of snow conditions, then you're probably planning your ski trips last minute and jet-setting off to wherever the latest storm can be found, and that's living the good life, without question. But families and casual skiers, who may not have the luxury or desire to chase storms, might benefit from a shift in strategy. Ski travel in the main winter months of December, January, February, and early March may lead to an epic, week-long powder frenzy. Or, you could show up to variable conditions—perhaps even bad conditions—with temperatures near freezing and the destination crowded, all after paying high-season rates. But go to a ski town in late-March or early-April, and the vibe shifts. Expectations are lower. Conditions could be bad or variable this time of year, but they also could be pretty good, which is kind of the same hit or miss situation as the other months. And if the snow is just so-so on your spring visit, it might not be the end of the world. Picture this: Wake up slow, take some runs, have a beer on the mountain, ski with locals (more locals, fewer travelers on the mountain in spring), maybe try out the tubing or snowshoe situation, spend the afternoon walking around a new mountain town in some relatively mild weather. If this sounds like a relaxing time, then spring skiing could be the vibe for you and your crew. Generally, lodging rates begin to drop later in the ski season in ski towns, so you can save some bucks to boot. Fun spring ski trips can be made to a wide variety of destinations, both in the States and abroad. But there are several reasons why Canada is amongst the best international options for Americans, some timely and others timeless. First, the timely. The Canadian Dollar is weak compared to the American Dollar right now, meaning that your trip to Canada could be heavily discounted at the moment—as of this writing, it's about a 25% discount. In addition to the favorable currency exchange, you also have reduced springtime rates at hotels in spring. It's a good way to enjoy, say, Banff, a place that tends to be pricy. The mountains hang over the town of Banff in Banff National Park. From town, you can catch a ski shuttle to all three resorts. There are many ski destinations in Canada, but one stands out for its offerings and easy access. Here, we look at a trip to the iconic Banff National Park and how it shapes up. Simply put, Banff is a world class wilderness area. The mountain scenery looms above the town, and only gets better the more you roam through the national park. Even if you don't step foot on the slopes, you will not regret being immersed in the mountain landscapes here. You want it to be a little wintry when hitting the slopes, but the temperatures in Banff during the heart of winter might make you think twice. The average temperatures in December, January, and February are all less than 20 degrees. It's not until April that the average high crosses 40 degrees (47 degrees). Yes, there's a reason that the ski resorts here have invested in bubble lifts, and that's because they are rather necessary during the prime winter months. If you don't want to bear the freezing temperatures, spring skiing is appealing. Banff is located about two hours by car from Calgary International Airport (YYC). Upon landing, you can hop on the Banff Airporter Shuttle and get dropped off at your hotel in Banff. Then, from your hotel, you can walk to a ski shuttle stop, where buses from the three ski resorts in Banff will pick you up and drop you off like clockwork. Three mountains, no car—try that somewhere else. The three mountain resorts are Sunshine Village, Lake Louise, and Norquay, and each offer something a little different. Lake Louise is the largest and offers the most terrain, plus stunning long-distance views; Sunshine has many historic on-mountain lodges and offers prime double-black terrain, such as areas like the Delirium Dive; Norquay offers views of Banff and takes only 7 minutes to reach by bus from downtown Banff on the ski shuttle. Sunshine Village Ski Resort offers several bubble lifts to help keep out the cold during the frigid winter months in Banff. Finding a Canadian in Banff is not impossible, but it's harder than you'd think, especially in the ski industry. Due to an interesting regulation, to live in Banff, you must work in Banff National Park (i.e., few digital nomads). And, due to a Commonwealth visa program, the town is chock full of Brits, Aussies, and Kiwis who live and work there. Go hang out at a local dive such as Tommy's Neighbourhood Pub (try the steak sandwich) or one of the craft breweries and you're sure to find an international crowd. Banff's gets an average of 14 days of snow in April, so there's a chance you end up with some fresh inches. Though Norquay, the lowest elevated resort of the three, usually closes last half of this month, skiing here in April is nothing new. Lake Louise doesn't close until May 4th, and Sunshine's projected closing date is May 18th. (For comparison, my local ski hill in Colorado closed April 5th). Imagine the irony if you plan a spring ski trip and end up with loads of fresh snow. Depending on who you are, the conversion rate and the spring prices will have one of two effects: It will save you money, which you will save, or it will save you money, which you will reinvest in other aspects of the trip. If you choose the latter, you may decide to rent some premium gear to try out for next season. Banff's Black Tie Ski Rental service will drop off and pick up rentals from your hotel, with a fitting right there in the lobby. Spring prices are pretty reasonable for that level of service—at this moment of writing, the premium ski package, including boots, is only about $60 Canadian ($45 U.S.) per day.
