After the Swiss National Bank (SNB) has undermined global confidence in regulators, any sudden action by the US Fed might trigger a feverish buyout of the dollar, pushing its FX rate sky-high, demolishing the entire architecture of international trade in goods and services.
MOSCOW, January 21 (Sputnik), Kristian Rouz — The recent shock to the currencies markets, having come from Switzerland on 15 January, when the franc appreciated by 23% in a single-day trading session, has badly damaged the international financial stability, with capital leaving the Eurozone and investors feverishly buying out gold and US bonds. Such a dramatic change in FX rate of one of the global reserve currencies has triggered major debt risks worldwide, from Eastern European mortgages to Russia’s burden of excessive corporate debt. Now, across the Atlantic, the robust economic growth and market optimism in the US have spurred the anticipation of the Federal Reserve’s interest rate hike, inevitably triggering the dollar to strengthen. Continue reading