A warning to all you exposed to the dollar carry trade, either directly or indirectly. A group which includes:
- Anyone borrowing in USD to buy short-term assets in another currency.
- Anyone borrowing short-term in USD to buy long-term USD assets, i.e., every U.S. bank.
- Any U.S.-based company selling their product to non-USD consumers.
- Anyone invested in a U.S. company who is borrowing short-term in USD and buying long-term assets and/or selling products in non-USD currencies. That is, anyone long U.S. stocks or U.S. corporate bonds.
- Any U.S.-based investor long any non-USD asset, i.e. any investor in foreign stocks or bonds.
So basically anyone holding anything other than cash.
Below is the intra-day chart on USD/EUR.