HSBC warns of destabilising moves in 2015

Tail risks are creeping higher in the world economy

US dollars

Foreign exchange markets are underestimating the danger of "destabilising" currency moves in 2015 as increased tail risks may see the dollar strengthening to extreme levels, which could in turn trigger a currency crisis in emerging markets (EM) and intensify currency wars in Asia, analysts at HSBC warn.

The bank identifies three main sources of potential market stress, all of which would push the greenback even higher and result in a vicious feedback loop. Strategists Daragh Maher and David

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