23 Oct 2013
Flash: Shifting out of dollars are exaggerated? -JP Morgan
FXstreet.com (London) - Research teams at JP Morgan said that these fears about reserve managers actively shifting out of dollars are exaggerated.
Key Quotes:
“…in our view, due to the still very low probability of breaching the debt ceiling in the future and the lack of liquid alternatives”.
“Recall that the end of the euro as a reserve currency was announced annually during the EMU Crisis. US political dysfunction isn’t an unfamiliar phenomenon, although incidents have become more frequent since Republicans took the House in 2010, and it now aligns the US with many parts of Europe & old Japan”.
“US fiscal fights have always failed to generate a durable change in central bank purchases of US Treasuries, probably because the debates are around ordinary issues rather than existential ones (unlike with EMU)”.
Key Quotes:
“…in our view, due to the still very low probability of breaching the debt ceiling in the future and the lack of liquid alternatives”.
“Recall that the end of the euro as a reserve currency was announced annually during the EMU Crisis. US political dysfunction isn’t an unfamiliar phenomenon, although incidents have become more frequent since Republicans took the House in 2010, and it now aligns the US with many parts of Europe & old Japan”.
“US fiscal fights have always failed to generate a durable change in central bank purchases of US Treasuries, probably because the debates are around ordinary issues rather than existential ones (unlike with EMU)”.