But besides the evidence we can see in FX flows, there's another story in the background that is worth taking notice of.
Now, the monthly data hasn't quite yet captured the dovish pivot by the Fed itself but after the rate cut decision last week, it's not to say that the Fed has leaned overly dovish in any case.
For one, foreign investors ended up with net purchases of long-term US securities worth $78.8 billion. The year-to-date figure shows net purchases worth $865.1 billion. For some context, the 2024 figure showed net purchases worth $1,180.4 billion. So, it's not to say that there has been a material slowing down in investor appetite for US assets.
The net outflow in July comes after record inflows during May and June, which amounted to $115.8 billion and $163.1 billion respectively. And we all know, one month doesn't make a trend.
As such, that continues to underscore the strong appetite for US assets even during these supposed testing times for the dollar and the US economy.
The dollar may be softer this year amid poor market sentiment and a confidence struggle in general. But if and when these headwinds come to pass, the underlying flows suggest that any potential rebound in the dollar is one that is going to carry a large weight supported by the still strong investor appetite for US assets.
And if anything else, this does shoot down the thinking that foreign investors are moving away from the dollar and the US. In fact, it's far from the reality as seen above.
This article was written by Justin Low at investinglive.com.Hence then, the article about are capital flows really moving away from the us this year was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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