Currency Update for Steel Trading Nations

The big picture is as follows: from the 2015 Article IV Consultation with the United States of America Concluding Statement of the IMF Mission May 28, 2015 (heavily abridged by SMU).

“At current levels of the real exchange rate, the U.S. dollar is assessed to be moderately overvalued. As a result, the current account deficit is expected to move further away from medium-term fundamentals, to more than 3 percent of GDP over the medium-term. The stronger dollar is impacting U.S. growth and job creation, as well as weighing on inflation. Higher U.S. interest rates could still result in a significant and abrupt rebalancing of international portfolios with market volatility and financial stability consequences that go well beyond U.S. borders. There is a strong case for waiting to raise rates until there are more tangible signs of wage or price inflation than are currently evident. “