Bloomberg News: Dollar Faces $2.5 Trillion 'Avalanche' of Asian Sales, Jen Says
Article by Ruth Carson in Bloomberg News
The dollar may face a $2.5 trillion “avalanche” of selling as Asian countries unwind their stockpile of the world’s reserve currency, according to Stephen Jen.
Asian exporters and investors may have amassed an “extremely large” pile of dollars through the years, widening the region’s trade surplus with the US, Eurizon SLJ Capital’s Jen and Joana Freire wrote in a note on Wednesday. As a US-led trade war deepens, some Asian investors might repatriate chunks of funds or ramp up levels of protection against a weakening dollar — potentially triggering an exodus from the world’s reserve currency.
“We suspect these dollar hoardings by Asian exporters and institutional investors may be extremely large – possibly on the order of $2.5 trillion or so – and pose sharp downside risks to the dollar vis-à-vis these Asian currencies,” Jen and Freire wrote.
The greenback’s long-term appeal is coming under threat as ......