Commentary
April 2022 will go down in history as a milestone that has only been seen on three previous occasions since 1973; it’s a month in which the S&P500 Index and U.S. Treasuries have fallen at the same time, 5 percent and 2 percent, respectively. Additionally, the U.S. dollar has appreciated against the main currencies with which it trades and reached a new year high.
Years of monetary laughing gas have not diminished the strength of the U.S. dollar as the world reserve currency, rather the opposite. Now we witness the vacuum effect: inflows into the U.S. dollar in a period of risk aversion.
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