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The recent downgrade of the US's AAA rating by Moody's has heightened concerns over the USD, prompting investors to consider rebalancing their FX exposure. With expected gradual USD weakness, opportunities to diversify into currencies like EUR, JPY, GBP, and AUD are emerging, alongside maintaining a 5% gold allocation due to ongoing geopolitical tensions. Additionally, the AUD faces downside risks from a dovish RBA, while the USDHKD remains a viable funding currency within its pegged trading band, particularly when interest rate differentials favor HKD borrowing.
Gold prices have plateaued amid improved risk appetite and recent US-China tariff de-escalation, prompting a recommendation to optimize gold allocations during price dips. Despite a stronger USD potentially cooling demand, robust medium-term gold demand persists, driven by central banks and ETFs. As USD strength may be temporary, diversifying out of USD into gold and other currencies is advised, with expectations of gold reaching USD 3,500/oz in the central scenario.
The first week of the new Trump administration has seen a recovery in risk assets, yet the release of DeepSeek's lower-cost AI offering highlights ongoing risks. In this period of heightened uncertainty, maintaining portfolio discipline through diversification and balance is crucial, alongside focusing on key areas with medium to long-term potential and implementing defensive measures against risk aversion spikes.
Julian Weeks
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
USD Volatility Prompts Strategic FX Rebalancing Amid Economic Uncertainty
Australian Dollar
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Julian Weeks
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02:30 22.05.2025
gold price fluctuations and investment strategies in uncertain markets
Japanese Yen
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Julian Weeks
Donald Trump
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02:30 14.05.2025
diversification strategies essential amid market recovery and ongoing risks
09:15 28.01.2025
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