Nine Trillion, Behind The US Debt, Will The US Dollar Bull Market Last For Several Years?

The US dollar index continued last week's strength. The exchange rate reached a peak of 99.71 at the beginning of the European market, and the bull market is expected to launch a further impact on the 100 major points, or even retest the pre high level of 100.40.

Technically, the US dollar is still rising in the daily line level.

The MACD index is formed by double lines, and the red kinetic energy column is enlarged, which shows that the energy of the multichannel increases significantly.

Previously, some agencies, including HSBC (HSBC), warned about the risk of the dollar short - term risk, called a greater risk of multiple dollars.

HSBC believes that "the US dollar rally is coming to an end, which is totally contrary to the broad expectations of the market. Many market participants believe that the US dollar has more room for growth.

There are many messages that can support our view. Here we consider from the perspective of economic data.

In addition, Prudential Global Total Return Fund, MFS Global Bond Fund and Janus Global Janus fund also reduced US dollar long positions.

After a continuous surge, it is also reasonable for institutions to hint at the risk of overbought dollars.

However, Stephen Jen, director of foreign exchange research at Morgan Stanley, recently unveiled a "big secret" that could last several years in the US dollar Stanley.

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(IMF) Stephen Jen, an economist and former director of foreign exchange research at Morgan Stanley, pointed out that up to $9 trillion of bonds will be the potential power to support the rise of the US dollar. Morgan

Jen said, "some investors speculate that the US dollar rally is going to quell, but they may have overlooked one.

Another important reason for further strengthening: nine trillion US debt.

Data from the bank for International Settlements (BIS) show that the balance of US dollar bonds issued by sovereign and corporate issuers outside the US reaches a record $9 trillion, most of which need to be repaid in the coming years.

In addition, the central banks around the world are now changing the way to create more demand.

Jen believes that "the potential of huge US debt repayment implies a structural shortage of global dollars, and repressed demand will support the continued appreciation of the US dollar over the next few years."

He further pointed out that short-term fluctuations in the FED policy change or economic data may be inundated by the general trend of further appreciation of the dollar.

The recent consolidation may be temporary.

A huge amount of US debt may be a potential driving force for the US dollar, but for the global economy, it will be the source of uncertainty.

Market analysts pointed out that if the Fed expects to raise interest rates in the year as expected, then the cost of corporate and government borrowing will rise, and the global economic recovery, which is already struggling with a strong dollar, is expected to add to risks.

Sri Mulyani Indrawati, executive director of the world bank's World Bank, said: "the Fed's interest rate rise is a hidden worry for a large number of emerging market countries holding US dollar bonds, and developing countries will have to face these new (normal) problems."

Indrawati points out, once the Federal Reserve announces raising interest rates, Turkey is likely to face a "more complex" capital flow environment.