The hottest Currency Markets Substack posts right now

Japan’s huge debt, rising interest rates, and a weakening yen risk triggering a global unwind of yen-funded carry trades that could force selling of US Treasuries and equities.
Massive government overspending and money-supply expansion are debasing fiat currencies, pushing investors and central banks to buy physical gold as a long-term store of value and weakening the dollar’s dominance.
Silver faces a real physical shortage because paper contracts far exceed available metal and industrial demand is rising, causing backwardation, squeeze risk, and extreme price volatility.

The Japanese Yen's value impacts global trade. When the Yen is weak, Japanese exports become cheaper for other countries, but imports get more expensive.
Japan's massive debt isn't a problem as long as their interest rates stay low. This keeps borrowing cheap, allowing them to manage their debts without immediate consequences.
The USD/JPY exchange rate is crucial for understanding the global economy. Changes in this rate can affect investments and interest rates in other countries, making it a key chart to watch.

The US dollar is still the main currency for global trade, but some people worry about America's declining economic power. There are doubts about how long the dollar will keep its leading position.
Foreign investments in the US are strong because many countries benefit from higher returns on their investments here. Even though the US has a large debt to other countries, this system still works for both sides.
In recent years, the benefits of US economic growth have mostly gone to advanced economies that are allies of the US. This situation creates a sort of dependency, as these countries have much at stake in maintaining the strength of the dollar.

The global financial system heavily depends on the US dollar, causing a constant demand for dollars worldwide.
Triffin's Dilemma and the Dollar Milkshake Theory highlight the systemic risks and implications of the US dollar's dominance.
The Fed plays a critical role in stabilizing the global financial system by supplying dollars; any missteps could lead to widespread financial instability.

The popular "dollar debasement" trade is overblown and investors are likely overestimating how much trouble the dollar actually faces.
Investors are underestimating the risk to U.S. Treasuries, which may be the more vulnerable asset class right now.
Either the debasement narrative is misplaced or investors are only catching up to trends that began about fifteen years ago, so this isn’t a new surprise and may reflect outdated thinking.

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The yen has weakened to ¥128.6 from earlier lows, fluctuating as markets don't move in straight lines.
MOF interventions in currency markets may not have a lasting effect if the yen's decline reflects fundamentals.
The interest rate gap between the US and Japan is a major factor driving the yen's decline, with investors shifting money to the US due to higher rates.

US tariffs tend to reduce global demand for dollars because they shrink the trade deficit and lower the capital account surplus.
A new regulatory framework for dollar-pegged stablecoins makes it easier and safer for investors to hold dollar exposure, which can boost demand for dollar-denominated stablecoins.
In countries hit by high tariffs that also have capital controls, people can’t buy dollars through banks so they rush into dollar stablecoins, driving up stablecoin demand and prices, while countries without capital controls see little change in stablecoin demand.

Foreign cooperation to stop yen decline seems unlikely, making intervention less effective without U.S. approval
A weak yen may not boost exports as much due to increased overseas production and decreased competitiveness
Currency depreciation in Japan leads to higher prices for imports and reduced benefits for the country

Many people wrongly assume that government bonds always have no risk, especially when they are in local currency. But countries can default on these bonds, making their interest rates not risk-free.
There is no single global risk-free rate; it varies with inflation across different countries. Mixing risk-free rates from different currencies can distort financial analyses.
Choosing the currency for valuation doesn’t change a company's inherent value, since risks and cash flows should align with the currency used.