Institute of International Finance May 15, 2025

Global Macro Views: FX: From Buffer to Amplifier

Marcello Estevão ·

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About this work

Exchange rates increasingly transmit economic and political shocks across borders. A softer dollar offers emerging markets some relief, yet credit spreads and term premiums can outweigh that benefit in financing conditions. Policy uncertainty and shifting investor positions amplify currency movements, while dollar liquidity remains central during stress despite gradual reserve diversification.

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Marcello Estevão, Jonathan Fortun (2025). Global Macro Views: FX: From Buffer to Amplifier. Institute of International Finance.