Headed for a test?

By Jim Dondero | March 05, 2015

  • The US dollar again moved higher last week, strength we believe will continue given the greenback has emerged from a multi-year trading range. Looking at the other side of the coin, both the Yen and Euro are likely to remain weak, given both countries have clearly embarked on economic policies which should not be friendly to their currencies.
  • This global deflationary trend makes for a tough environment for the emerging markets, many of which have economies which are based on natural resources. Brazil is a prime example, as the Brazilian Real reached multi-year lows last week amid growing economic and political unrest, which may provide future investment opportunities
  • Equity markets in developed nations have been far stronger, with broad market averages in many countries moving to new highs. These ‘breakouts’ often get tested, which is most likely where many are now headed.


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