Macroeconomic Specialist Raoul Pal said significant increases in risky financial assets such as stocks and crypto assets if the US dollar continues to weaken. In particular, if the US dollar index (DXY) further decreases and the economic cycle improves, a long -term rise trend in the markets may be seen.
Dollar index and economic cycle
The US Dollar Index measures its value against six major economic currencies around the world. According to the latest data, the index is at 98 levels. Pal states that as a result of the recovery of the economic cycle, both individuals and enterprises may increase in the expenditable income and this may increase the demand for risky assets. Analysts have long been expressing the opinion that the current economic conditions and the weakness in the US dollar may cause significant price movements in the markets.
Raoul Pal suggests that the economic imbalances brought by the period after the pandemi period are still continuing and therefore the economic cycle may be longer than expected. Pal, the dollar index below 90 to go down to all types of assets in the markets can create a strong wave of ascension, he said.
Global liquidity and crypto currencies
Pal points out that the increases in global liquidity are another element that can carry asset prices up. Pal says that governments may have to increase the supply of money to combat high debt levels and that this can trigger a new upward trend in financial markets.
“When we use the liquidity frame, the framework of the business cycle and the financial conditions framework, the probability of providing more liquidity as the debt needs to be converted, which will strongly push the asset prices up,” -raoul Pal.
Raoul thinks that both traditional financial vehicles and crypto currencies can be affected by these developments and see more demand. However, the view of the US dollar will continue to be decisive. We will see that changes in the dollar index closely affect investor behaviors and international markets.
Pal does not make a definite time estimation on how long the economic recovery will last and how to evolve the financial conditions. However, it reminds us that the attitudes of the central banks, monetary policy steps and global economic developments should be closely monitored.
Slimming and increasing global liquidity that may occur in the US dollar are among the elements that can lead to fluctuations in risky market instruments such as both share bills and digital assets. In this period, investors are recommended to carefully monitor market dynamics. Raoul Pal’s evaluations offer points that can be taken into account in creating investment strategies in economic recovery processes and monetary policy changes. Experts agree that the current conditions should be carefully monitored and market volatility should be considered.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
