Dollar at Limit of Strength as Economy Faces Pain, Rickards Says

The dollar has reached its “outer limit” against the euro as the U.S. economy faces the risk of its currency’s strength cramping growth, according to James Rickards, chief global strategist at West Shore Funds.

The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, climbed to an all-time high on Feb. 11 as the Federal Reserve considers raising U.S. interest rates for the first time since 2006. Meantime, European Central Bank’s plan to buy 1.14 trillion euros ($1.3 trillion) of public and private debt to revive price growth in the currency bloc has sent the euro sliding this year.

“It’s a zero-sum game,” Rickards, author of “Currency Wars: The Making of the Next Global Crisis,” said Thursday in New York in an interview on “Street Smart” with Trish Regan. “The euro can’t get lower without the dollar getting stronger and how much stronger can the dollar get without sinking, killing exports, creating deflation, doing all the things the Fed doesn’t want?”

The dollar has jumped 5.6 percent versus the euro in 2015, its best start to any year since 2009. The greenback appreciated to $1.1098 against the 19-member currency on Jan. 26, the strongest level since September 2003. It was little changed at $1.1417 per euro as of 11:24 a.m. London time Friday.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE