Ghost of 1990s Is Haunting Dollar and Slowing Further Gains

A new dynamic entered the $5.1 trillion currency market in recent days, as the dollar failed to keep pace with a rise in U.S. Treasury yields. One reason: traders are increasingly aware of the example of the period in the Clinton administration when a widening yield advantage didn’t work in the dollar’s favor, says Shusuke Yamada, chief Japan currency and equity strategist at Bank of America Merrill Lynch in Tokyo.

Summers and Eurasia Start the New Year With Dire Global Warnings

Former U.S. Treasury Secretary Lawrence Summers said investors are far too sanguine about the risks of Donald Trump’s policies, which analysts at Eurasia Group say could contribute to a level of global instability not seen since World War II. The Harvard professor, a Democrat who was Treasury chief under Bill Clinton, on Tuesday cited the possibility of protectionist measures by the U.S. as well as changes to foreign policy and domestic social programs as issues that are creating “extraordinary uncertainty.”