Hirst: Currencies Are the Real Place to Play the Macro

Your Real Vision Daily Briefing for May 13, 2020

Real Vision’s senior editor Ash Bennington sits down with managing editor Roger Hirst to discuss the latest in macro, markets, and coronavirus.

  • Currency markets are the optimal place to express a macro position because they haven’t been distorted by central bank liquidity injections so there’s better price discovery.
  • The US dollar’s strength has less to do with fundamentals than with sentiment; investors have seen the policy response by the Fed and perceive the dollar as a safe haven.
  • Amazon and other big tech stocks are not a play on the macro because when people need cash they will liquidate their positions.


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Volatility in the overall currency market has been well-behaved with little movement from the Euro or the Yen; all the action has been in emerging market currencies, Roger Hirst said during today’s Real Vision Daily Briefing.

He thinks that is the real place to play the macro because the lack of intervention from central banks in EM countries means that those markets have true price discovery, unlike asset prices in the US equity markets, which have been artificially inflated by the Fed.

He also said the Fed’s action is the driver of the dollar’s continued strength. If you look at the real rates between the US and Europe, it looks like the Euro should be stronger versus the dollar. In a normal world, Hirst said, you’d bet on the Euro going higher – but fundamentals are less significant now because the dollar represents a safe haven to investors.

Sentiment is also one of the reasons Hirst said he doesn’t consider Amazon or other big tech stocks a macro play. Once people have cash flow problems, bearish sentiment prevails, and emotions are at a peak, they will liquidate their positions, he said.

RELATED CATEGORIES: Europe, Market Analysis