Podcast
Questions and Answers
What has been a major driver of the strong dollar in Asia?
What has been a major driver of the strong dollar in Asia?
What is the stance of the Federal Reserve, according to Chairman Jerome Powell?
What is the stance of the Federal Reserve, according to Chairman Jerome Powell?
Why does the text suggest the Euro may be in trouble?
Why does the text suggest the Euro may be in trouble?
What is the author's view on the upcoming election in the US?
What is the author's view on the upcoming election in the US?
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What is a similarity between the US and Europe, according to the text?
What is a similarity between the US and Europe, according to the text?
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What is unique about the Bank of Japan's stance, according to the text?
What is unique about the Bank of Japan's stance, according to the text?
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Study Notes
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.
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Description
This quiz covers the impact of US monetary policy on the value of the dollar and its effects on other currencies in Asia and Europe.
