Secret to Dollar's Dim Future Found in Last Fed Hiking Cycle
- Echoes of 2004-07 greenback drop seen in current slump
- Strong global growth, U.S. political risk reduce dollar appeal
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Traders wagering on a dollar revival as the Federal Reserve continues raising interest rates need only look back to America’s most recent tightening cycle to see just how wrong those bets could go.
That’s the message from Credit Suisse Group AG and Amundi Pioneer Asset Management, who see numerous similarities between the global macro environments of 2004 and now. Brightening outlooks in Europe and China, rising commodity prices and scaled-back stimulus abroad are overshadowing continued U.S. rate hikes and fiscal accommodation.