00:00Now, all this does seem to raise the question of the greenback's safe haven role.
00:05Of course, we've been seeing the overwhelming concern being about the shutdown and the Fed's trajectory.
00:11The dollar has been coming under pressure for a couple of sessions now.
00:14Let's bring in Kamakshia Trivedi, Chief FX and Emerging Market Strategist at Goldman Sachs.
00:20Really good to have you.
00:21Good morning. It's nice to be here.
00:22So how are you positioning around the shutdown risks in the U.S.?
00:29Yeah, I think it's an important development.
00:31I think it's one that has to some extent been anticipated.
00:35So it typically tends to not have a huge amount of wall enhancing impact.
00:40But I think one of the narrative that had been gaining ground in the market in the last few weeks has been this sort of trend of U.S. data getting better.
00:48And I think the shutdown just arrests that and reverses that to some extent.
00:52I think it brings up the fact that potentially if it lasts longer, you could have some impact on the growth data.
01:00You could also have some impact on other metrics in the labor market.
01:05And especially when you don't get those sort of official data, if it lasts through a couple of weeks, then there'll be more emphasis on private sector data, other survey data.
01:13And so I think what it's done is it's put back a little bit of doubt in the minds of the people who are looking for a U.S. economic recovery.
01:20And that in turn has put the dollar on the back foot once again.
01:24So are we looking at new lows on the dollar, you think?
01:27I think the bigger picture here is that the dollar is still overvalued.
01:33You know, it's less overvalued than it was at the start of the year.
01:36But that high valuation is gradually eroding with the U.S. being no longer exceptional in a macroeconomic sense or in a market sense.
01:44But exactly against what, that keeps shifting, right?
01:47And so if it was euro at the start of the year, it was CNY in August, it's been emerging markets over the summer.
01:54You're beginning to see the yen finally move as well.
01:56And that's quite typical.
01:58When concerns around U.S. growth come to the fore, when you have both U.S. equities, U.S. rates declining together,
02:04a little bit like you've seen in the past few sessions, the yen tends to be the primary beneficiary.
02:10And that's what we're seeing in the last couple of days.
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