FX Markets

FX Markets Update

FX Markets Update

We now forecast major CEE currencies to outperform the euro

We now expect interest rates to rise across Central and Eastern Europe in the coming years and for all the major currencies to strengthen against the euro, with the Czech koruna and Polish zloty faring best.

10 June 2021

FX Markets Update

Why we remain bearish on the renminbi

We continue to think that the renminbi will end the year weaker against the US dollar and, while not an essential factor in that forecast, the recent steps by China’s policymakers to weaken the currency reinforces our view that the renminbi is nearing a turning point.

4 June 2021

FX Markets Update

What to make of the commodity currency divergence

Several emerging market commodity currencies have struggled this year, despite the rally in most commodity prices. We think that most will face further headwinds, even the current valuation gap may provide some buffer.

1 June 2021
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FX Markets Update

Why we still favour the US dollar over the euro

Despite its recent resurgence, we continue to think that the euro will weaken against the dollar this year.

FX Markets Update

Our top 10 calls on currency markets

This Update sets out the main calls of our new FX service. As part of our expanded coverage of currency markets, we will maintain and continuously update this set of core predictions. Our first FX Outlook includes more detailed analysis, as well as forecasts for all the major DM and EM currencies.

12 May 2021

FX Markets Update

We expect bond yield divergence to favour the USD

We expect higher government bond yields in the US than in other developed markets (DMs) to push the US dollar up, as has generally been the case since the Global Financial Crisis. Admittedly, the relationship between the government bond yield gap and the greenback hasn’t always held. When appetite for risk is weak, safe-haven demand pushes the dollar higher and…

8 April 2021

FX Markets Update

Revising up our forecast for the US dollar

We now expect that the US dollar will strengthen somewhat over the next couple of years as the US economy outperforms and its policy mix diverges from that in most other major economies.Last year, the US dollar went through two distinct phases. The first, in Q1, saw the greenback appreciate sharply as the COVID-19 pandemic caused risky assets to plunge…

11 March 2021

FX Markets Update

Rising bond yields and the outlook for the US dollar

The rise of government bond yields in the US and other developed markets (DMs) this year has made a significant impact on currency markets and, if it continues, would challenge our forecast for a weaker dollar.For most of last year, the primary driver of currency markets was appetite for risk. As Chart 1 shows, both DM and emerging market (EM)…

5 March 2021
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