New Global Currency Wars May Have Begun, Says Edwards
Renowned bear and Societe Generale strategist Albert Edwards usually looks at fundamental valuations and big macro trends, but in a recent not he shows that he’s just as willing to turn to technical analysis in his search for bad news. Right now he’s concerned that a weakening Yen, having just fallen below a fifteen-year uptrend, could be the catalyst for bigger global problems.
“A fragile Chinese economy could be pushed over the edge by a further yen devaluation – in many ways a replay of the Asian crisis of 1997,” says Edwards. “And just as the Chinese real economy data has taken a turn for the worse in August, the yen has slipped below a key 15-year support level against the dollar. This is probably the most important chart investors should focus on. The next phase of global currency wars may have begun.”
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