Talk is in the air of a Plaza 2.0 accord (prosaically nicknamed 'Mar-a-Lago Accord') after the appreciation of several Asian currencies in recent days. But regardless of implicit or explicit FX deals, the dollar faces a secular weakening driven by a perfect storm of structural factors.
The Plaza Hotel, New York in 1985 was the setting for the eponymous agreement that led to an almost 50% decline in the dollar. Now rumors are bubbling that we are on the cusp of a similar accord after Asian currencies, such as the Taiwanese dollar and the Korean won, appreciated versus the dollar seemingly with the acquiescence of their central banks.
