Interesting comments from the IMF
The word 'divergences' should set off alarm bells for FX traders, because that's essentially what we're looking for. One country doing better than another is a currency trade and that's what's happening in the recovery and it's why EUR/USD is falling today once again.
Her full comments:
- Sees increased growth due to new US fiscal package and expected recovery in vaccinated economies this year
- Multi-speed recovery increasingly powered by US
- China sees 'extremely high uncertainty' over financial conditions
- US recovery could trigger higher interest rates, tighter financial conditions and big outflows from emerging and developing economies
- It's prudent to keep an eye on financial risk including stretched asset valuations
- IMF foresees sharp increase in insolvencies among small and medium-sized businesses
