Stanley Druckenmiller, a well-known American financier, has announced that he is currently shorting the US currency. According to the Financial Times, Druckenmiller, widely known as “The Druck,” believes the USD has had a wonderful run in recent years but is now beginning a protracted correction.
“One area I’m comfortable with is I’m short the US dollar,” Druckenmiller stated at a seminar in Oslo, Norway. Currency movements often last two to three years. We’ve got a lengthy [run] up.”
In 1992, Druckenmiller collaborated with billionaire financier and market expert George Soros to short the British pound against the German deutschemark, making more than $1 billion on the famous transaction.
Druckenmiller’s next step is to gamble against the US dollar and the “weaponization” of the USD, which American authorities have taken on the world arena, much to the dismay of other countries. He also anticipates that US officials will finally proceed with interest rate reduction and associated currency depreciation, which would drive his short position.
The former chairman of Duquesne Capital told the conference that he anticipates “a lot of swings” as the United States approaches an eventual recession. He’s apparently in the “hard landing camp,” which refers to a swift and violent transition from economic expansion to stagnancy.
Druck’s views are consistent with those of other notable macroeconomic experts who are presently dealing with the shifting chessboard of financial markets.
In a recent analysis, Stephen Jen and Joana Freire of asset management company Eurizon SLJ Capital said that Asia, Latin America, Africa, the Caribbean, and the Pacific Islands, together known as the Global South, were losing US dollar reserves.
“The dollar’s market share as a reserve currency fell dramatically in 2022, owing presumably to its zealous use of sanctions.” The extraordinary efforts taken by the United States and its allies against Russia have surprised significant reserve-holding nations.”
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