Latest news with #PaulMackel
Yahoo
4 days ago
- Business
- Yahoo
The Dollar's Collapse Party Might Be Ending -- HSBC Says the Real Bubble Is Forming Now
After an 8% slide in the Bloomberg Dollar Spot Index this year, investors seem convinced the dollar's pain is far from over. But HSBC (NYSE:HSBC) isn't buying the euphoria. In a fresh note to clients, Paul Mackel and his team flag signs of what they call a growing anti-USD bubblea mirror image of the bullish dollar wave seen just a few years ago. With traders extrapolating recent weakness into the future, HSBC believes sentiment may be tipping into crowd-think territory. Warning! GuruFocus has detected 6 Warning Sign with HSBC. The dollar's fall has been fueled by U.S. tariff drama, rising global de-dollarization talk, and general unease around Washington's policy direction under Trump. But HSBC notes that some of the initial catalystslike the shock from the April tariff announcementare now old news. What's more, historical correlations between the dollar and U.S. yields are starting to re-emerge, which could be an early sign that the dollar is bottoming out. Equities and yields are also moving in tandem again, hinting at a broader return to fundamentals. Still, the bears aren't out of ammo just yet. HSBC highlights scenarios that could keep the pressure on: more policy chaos, a faster-than-expected global rebound, or even leadership changes at the Fed. While none of these are base case assumptions, Mackel's team urges investors to stay alert. Bubbles don't last forever, they wrote. And if this really is an anti-dollar bubble, the unwinding could be just as sharp. This article first appeared on GuruFocus.
Yahoo
4 days ago
- Business
- Yahoo
Dollar-Selling Is Becoming a Bubble, Which May Burst, HSBC Says
(Bloomberg) -- Relentless dollar-selling is starting to look like a bubble — and, like all bubbles, it will eventually pop, according to HSBC Holdings Plc strategists. Why Did Cars Get So Hard to See Out Of? How German Cities Are Rethinking Women's Safety — With Taxis Philadelphia Reaches Pact With Workers to End Garbage Strike Traders appear to be fixated on the dollar's steep decline this year, and tempted to extrapolate that to future performance, HSBC strategists led by Paul Mackel wrote in a research note. That's symptomatic of 'bubbly-like' behavior, they said. 'It was not long ago that a strong USD bubble was evident, but the opposite is occurring: an 'anti bubble' of sorts,' the strategists wrote. ''Bubbly-like' characteristics exist, which is a warning sign that a USD bottom may not be far away.' The Bloomberg Dollar Spot Index has tumbled more than 8% this year as aggressive US tariffs and their chaotic rollout raised questions about the stability of the world's reserve currency. HSBC sees dollar softness continuing in the coming months, but arguments for more significant downside had become 'overly one-sided,' the strategists said. While uncertainty about US policies eroded the dollar's haven status and added to the 'de-dollarization' theme, the degree to which they warrant further selling has diminished since President Donald Trump first announced wide-ranging tariffs in April, the strategists said. A return to a more conventional framework in which the dollar is correlated to US yields could signal that a bottom to the dollar's weakening trend is approaching, they said, adding that a similar correlation between US equities and yields was showing signs of picking up. On the other hand, the dollar decline could gather momentum if US policy uncertainty 'turns problematic once more' or the global economy begins to accelerate. While neither is the bank's base case, 'we need to be aware of the risks,' they said. Replacing Federal Reserve Chairman Jerome Powell and the euro's outperformance could be possible triggers, they added. 'While we think through some downside scenarios to the USD, we must be cognizant of what could mark the end of the currency's decline,' Mackel and his team wrote. 'In our view, an 'anti-USD bubble' has been forming. Although it is not ready to pop, bubbles do eventually.' 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Trump's Cuts Are Making Federal Data Disappear Trade War? No Problem—If You Run a Trade School Soccer Players Are Being Seriously Overworked Will Trade War Make South India the Next Manufacturing Hub? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
4 days ago
- Business
- Business Times
Dollar-selling is becoming a bubble, which may burst, HSBC says
[LONDON] Relentless US dollar-selling is starting to look like a bubble – and, like all bubbles, it will eventually pop, according to HSBC Holdings strategists. Traders appear to be fixated on the dollar's steep decline this year, and tempted to extrapolate that to future performance, HSBC strategists led by Paul Mackel wrote in a research note. That's symptomatic of 'bubbly-like' behaviour, they said. 'It was not long ago that a strong USD bubble was evident, but the opposite is occurring: an 'anti bubble' of sorts,' the strategists wrote. ''Bubbly-like' characteristics exist, which is a warning sign that a USD bottom may not be far away.' The Bloomberg Dollar Spot Index has tumbled more than 8 per cent this year as aggressive US tariffs and their chaotic rollout raised questions about the stability of the world's reserve currency. HSBC sees dollar softness continuing in the coming months, but arguments for more significant downside had become 'overly one-sided,' the strategists said. While uncertainty about US policies eroded the dollar's haven status and added to the 'de-dollarisation' theme, the degree to which they warrant further selling has diminished since President Donald Trump first announced wide-ranging tariffs in April, the strategists said. A return to a more conventional framework in which the dollar is correlated to US yields could signal that a bottom to the dollar's weakening trend is approaching, they said, adding that a similar correlation between US equities and yields was showing signs of picking up. On the other hand, the dollar decline could gather momentum if US policy uncertainty 'turns problematic once more' or the global economy begins to accelerate. While neither is the bank's base case, 'we need to be aware of the risks,' they said. Replacing Federal Reserve chairman Jerome Powell and the euro's outperformance could be possible triggers, they added. 'While we think through some downside scenarios to the USD, we must be cognisant of what could mark the end of the currency's decline,' Mackel and his team wrote. 'In our view, an 'anti-USD bubble' has been forming. Although it is not ready to pop, bubbles do eventually.' BLOOMBERG
Bloomberg
4 days ago
- Business
- Bloomberg
Dollar-Selling Is Becoming a Bubble, Which May Burst, HSBC Says
By and Masaki Kondo Save Relentless dollar-selling is starting to look like a bubble — and, like all bubbles, it will eventually pop, according to HSBC Holdings Plc strategists. Traders appear to be fixated on the dollar's steep decline this year, and tempted to extrapolate that to future performance, HSBC strategists led by Paul Mackel wrote in a research note. That's symptomatic of 'bubbly-like' behavior, they said.
Free Malaysia Today
19-05-2025
- Business
- Free Malaysia Today
Dollar slips after US credit downgrade, Aussie edges higher before RBA
The greenback slipped as much as 0.6% to ¥144.80 for the first time since May 9. (Reuters pic) TOKYO : The US dollar dipped to a one-week low versus the safe-haven yen today as markets digested a surprise downgrade of the US government's credit rating and as trade friction concerns weighed on sentiment. Australia's dollar turned higher following three days of declines ahead of tomorrow's Reserve Bank of Australia (RBA) policy announcement, with a quarter-point cut widely expected. Moody's cut the US's top sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about its growing US$36 trillion debt pile. The news saw the dollar turn lower against its major rivals following four straight winning weeks when it was boosted by rising optimism for US trade deals and then a thaw in relations with China that eased fears of a global recession. The greenback slipped as much as 0.6% to ¥144.80 for the first time since May 9 on Monday, while the euro gained as much as 0.3% to US$1.1199. 'While the decision itself is seen as a catch-up to S&P's move on Aug 5 2011 and Fitch's announcement to do the same on Aug 1 2023, Moody's decision could still feed US dollar bears,' said Paul Mackel, global head of FX research at HSBC. 'Given this rating erosion has been slow moving, the simple takeaway is Moody's step should not matter for the US dollar. However, one needs to be careful with this assumption,' Mackel said. US treasury secretary Scott Bessent said in television interviews yesterday that President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in 'good faith'. However, a Financial Times report that the US had begun serious trade talks with the EU, breaking a long deadlock, offered some hope for additional deals after Washington inked a framework agreement with Britain earlier this month. Trump has previously said he has potential deals with India, Japan and South Korea as well, although talks with Tokyo seem to be stumbling over car tariffs. In the market, 'there's a lot of complacency about the ability to pull off deals,' said Ray Attrill, head of FX strategy at National Australia Bank. 'Confidence that the US economy is going to weather this is very much open to question,' Attrill said. Trump cleared a hurdle towards passing a sweeping tax cut bill that would add an estimated US$3 trillion to US$5 trillion to the nation's debt over the next decade, after winning approval from a key congressional committee. The dollar declined 0.2% to CHF0.8358, another safe-haven currency. Sterling added 0.1% to US$1.3297. 'The focus on US growth risks and the US administration's policy agenda may have put the US safe-haven status in question,' said Mahjabeen Zaman, head of foreign exchange research at ANZ. The Australian dollar edged up 0.1% to US$0.6413 after sliding more than 1% over the prior three sessions. Markets have priced in a certainty of a quarter-point cut to the RBA's 4.10% cash rate tomorrow, as slowing inflation allows policymakers to respond to rising global risks. The central bank's guidance will be key, as investors have reduced their expectations for rapid-fire rate cuts in the coming months following the Sino-US tariff truce and robust Australian employment data. New Zealand's kiwi dollar rose 0.2% to US$0.5890. Bitcoin briefly jumped as much as 2.8% to reach US$107,060.46 for the first time since January, the same month that the token notched its all-time peak of US$109,071.86.
