Rabobank’s Foley Says Yen to Outperform Dollar on Geopolitical Risk

The video discusses the relationship between the dollar and safe haven currencies, focusing on the dollar-yen pair and its behavior under geopolitical risks. It highlights the correlation between the dollar index and emerging markets, explaining the global demand for dollars due to its role as a primary global payment currency. The video concludes with an analysis of how geopolitical risks might affect the dollar and yen, suggesting that while the dollar remains firm, the yen may outperform as a safe haven.

What is the relationship between the dollar index and the MCI emerging market index?

• They are inversely correlated.

• They are not related at all.

• They have a reasonable correlation.

• They move in opposite directions.

Why do emerging markets have a significant need for dollars?

• To stabilize their economies.

• Due to dollar-denominated debt and demographic needs.

• To pay for imports.

• To invest in local currencies.

What is one reason the dollar is considered the number one global payments currency?

• It is the most stable currency.

• It is used in most international trade agreements.

• It is backed by gold.

• It is widely needed in emerging markets.

How might geopolitical risks affect the dollar and yen?

• The dollar will weaken, and the yen will weaken more.

• The yen will weaken, and the dollar will strengthen significantly.

• The dollar will remain firm, and the yen will outperform.

• Both the dollar and yen will lose value.

In an environment with geopolitical concerns, what is expected of the dollar's performance against other currencies?

• The dollar will weaken against all currencies.

• The dollar will remain relatively firm.

• The dollar will outperform all other currencies.

• The dollar will lose its status as a safe haven.