Rakuten Securities' Twidale Sees U.S. Dollar Moving Higher

The transcript discusses the ongoing strength of the US dollar, influenced by the trade war and Federal Reserve's rate hikes. It highlights the escalating tensions between the US and China, with potential impacts on the yuan. The yuan's role as an anchor currency is examined, along with its performance against the dollar and a trade-weighted basket. The discussion suggests that while short-term solutions may not be effective, long-term strategies could stabilize the yuan. The importance of monitoring the yuan against both the dollar and the basket is emphasized for market players.

What is one of the main factors contributing to the potential for further dollar strength?

• Increased foreign investment in the US

• A decrease in global trade

• The Federal Reserve's rate hikes

• A decline in US economic growth

How is China responding to the escalating trade tensions with the US?

• By increasing tariffs on US goods

• By reducing exports to the US

• By allowing the yuan to appreciate rapidly

• By implementing gradual measures to manage the yuan

What is a crucial level for the yuan that might trigger aggressive action from the PBOC?

• 7.5

• 7.0

• 6.8

• 6.5

What is the significance of the yuan's value against a trade-weighted basket?

• It reflects China's economic diversification in Asia

• It determines the yuan's exchange rate with the euro

• It only affects short-term currency fluctuations

• It is irrelevant to China's economic strategy

Why might experienced market players focus on the yuan against the basket rather than just the dollar?

• The basket provides a broader view of economic conditions

• The dollar is too volatile

• The basket is less important for long-term strategy

• The dollar is not a major trading currency