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Bloomberg: Dollar Overshoot Raises Risk of ‘Dangerous Year’ in Equities

A closer look at when the dollar appreciates above measures of fair value over the last half century suggests that the current rally has more room to run. That may not translate into good news for investors piling into U.S. equities as part of the Trump reflation trade.

“The dollar is overvalued, but currencies tend to push that,” said Stephen Jen, the London-based chief executive of hedge fund Eurizon SLJ Capital Ltd. “History suggests the overshoots tend to be very large in size, much larger than one would think are possible.”

Read the original article on the ‘Bloomberg’ website.

Posted on the 23/02/2017 at 9:41am by joana.