Global asset flows may push dollar to tipping point, says Horseman

Wall Street

US assets continue to draw international flows, predominantly from Japan, but the level of support may not be sustainable to keep the dollar strong, according to new research by contrarian hedge fund Horseman Capital.

In a note this week, Russell Clark, who leads the long-running London-based global equities hedge fund firm, observed how US Net International Investment Position (NIIP) as a percentage of GDP is now close to 50 per cent of GDP deficit, while private sector deficits in China and Europe are close to zero – implying “almost all flows” from Japan are heading to the US.

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