Introduction to European Fundamentals | Episode 17: 2021 Market Theme [Dollar Weakness] [Mitsuko Matsuzaki]
Miko Matsuzaki Profile
Matsuzaki Yoshiko. Began her trader career at Swiss Bank Tokyo Branch. Moved to the UK in 1988, and in 1989 joined the Dealing Room at Barclays Bank London Head Office. Gave birth in 1991. In 1997, she transferred to Merrill Lynch Investment Bank in London City. Retired in 2000. Currently, in addition to FX trading, she provides Europe-originated information to Japanese individual investors through blogs, seminars, and YouTube. Her books include “Miko Matsuzaki’s London FX” and “Always Profitable London FX” (both published by Jiyu Kokuminsha). Since 2018, she has operated the “Fundamentals College.” She also started an online salon for FX etiquette on DMM.
Blog:http://londonfx.blog102.fc2.com/
Fundamentals College:https://fundamentals-college.com/
Online salon:https://lounge.dmm.com/detail/1215/
※ This article is a reprint/edit of FX攻略.com March 2021 issue. Please note that the market information written in the text may differ from current market conditions.
What is Real Interest Rate?
Looking at major banks’ “FX Outlook for 2021” announced at the end of 2020, almost without exception they forecast a weaker dollar. If everyone is predicting dollar weakness to this extent, there must be some major factor at play. The factors I consider for dollar weakness are “real interest rates” and the “Average Inflation Target (AIT).”
When we say “interest rate,” there are several kinds. Policy rates set by central banks, and long-term yields such as government bond yields come to mind quickly. Then, what is real interest rate? Let’s proceed from there.
