Currencymarkets Fed globaleconomy Currency markets volatility is a sign the Fed has already broken the global economy - MKS' Shiels
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Nicky Shiels, head of metals strategy at MKS PAMP, said that the unrelenting rally in the U.S. dollar is starting to create tension within the global economy. The announcement caused the biggest selloff in recent history in the British pound. The selloff was contained Wednesday after the Bank of England said that it would buy long-dated U.K. government bonds, known as gilts.
Shiels said that gold investors should continue to look to trade gold in other currencies, especially where central banks have less aggressive monetary policy compared to the Fed.However, Shiels said that she also sees potential for gold against the U.S. dollar as the currency looks overvalued. She noted that the greenback has rallied 7% over the last 12 days, which could signify a technical blow-off top.
Shiels noted that historically, when the U.S. dollar has peaked, gold prices have rallied around 6% in the subsequent two months.
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