Central bankers drive markets secretly
In recent weeks, the greenback has showed us a shocking slump, so traders wonder what could generate such a massive sell-off, and a probable answer smells like conspiracy.
So, rumors keep whispering that during the recent Shanghai’s G-20 gathering, global policy makers dared to make a secret deal. Thus, they hoped to calm the financial markets.
At the February meeting of major bankers as well as policy makers from the 20 key economies any foreign-exchange pacts weren’t announced. However, it hasn’t stopped speculation that the plan was worked out behind closed doors. As a result, supposed effects of this mystery are already seen now. For instance, DXY has lost more than 3% since the meeting, thus driving a surge in shares, commodities as well as emerging markets assets.
Of course, there’s nothing unclear to any conspiracy theorists here. Obviously, there’s a world coordinated central bank effort aimed at weakening the greenback and it has already generated an enormous de-risking in credit markets and equity.
A weaker buck has been a number one reason of this 54% soar in US crude CLJ6 as well as 40% surge in Brent LCOK6.
However, the theorists argue a strong greenback could hardly be good for the global economy and market volatility could be inevitable.