Prolific American investor Stanley Druckenmiller says he’s now positioning himself short on the US dollar.
According to the Financial Times, Druckenmiller, also known as “The Druck,” says the USD had a good run in recent years, but is now at the start of a lengthy correction.
Speaking at a conference in Oslo, Norway, Druckenmiller said,
“One area I’m comfortable is I’m short the US dollar… Currency trends tend to run for two or three years. We have had a long [run] higher.”
Druckenmiller worked with billionaire financier and markets guru George Soros in 1992 to short the British pound against the German deutschemark, profiting over $1 billion on the famous trade.
Now, Druckenmiller’s next move is to bet against the US dollar and the “weaponization” of the USD that American authorities have brought to the global stage much to other nations’ chagrin. He also expects US policymakers to eventually move ahead with interest rate cuts and subsequent currency debasement, fueling his short position.
The former Duquesne Capital chairman told the conference that he expects “a lot of swings” as the US moves towards an inevitable recession. He reportedly said that he’s in the “hard landing camp,” or a rapid and volatile shift from economic growth to stagnancy.
The Druck’s sentiments align with other prominent macro economic analysts currently grappling with the changing chessboard of financial markets.
Stephen Jen and Joana Freire of asset management firm Eurizon SLJ Capital said in a recent report that Asia, Latin America, Africa, the Carribean and the Pacific Islands – collectively known as the Global South, were shedding their US dollar reserves.
“The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions. Exceptional actions taken by the US and its allies against Russia have startled large reserve-holding countries.”
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