US Economic Policy and Currency Trends

The Strong Dollar's Impact on Asia

• The Japanese yen, Korean won, Malaysian ringgit, and other Asian currencies have hit multi-year lows against the US dollar.
• The strong dollar is the dominant economic story in Asia so far this year.

Interest Rate Divergence

• The US has tighter monetary policy compared to other major economies, with higher short-term interest rates.
• Federal Reserve Chairman Jerome Powell is committed to maintaining tight policy until the 2% inflation target is achieved.
• Other major central banks, including the Bank of Japan, are likely to cut interest rates or resist raising them.

Economic Growth Divergence

• The US economy is expected to grow faster than Europe's, driven by growth-boosting policies.
• Europe's economy is hindered by unsustainable social-welfare states, investment-punishing taxation, and lunatic energy policies.
• Deteriorating demographics also contribute to Europe's slower economic growth.

Impact on the Euro

• The euro is likely to face a new calamity due to the divergence in economic growth and monetary policy between the US and Europe.
• The upcoming election in the US offers more hope for growth-boosting policies than Europe's recent and imminent elections.