Tag Archives: Currency forecast

The near-term impact will likely be limited but this is a clear negative for trade negotiations. Shortly after the renminbi’s sharp depreciation on Monday, the US Treasury Department labelled China a currency manipulator. This is the first time in 25 years that the US government has designated a country as a currency manipulator. According to the US Treasury Department, the decision was triggered by the perceived lack...

The near-term impact will likely be limited but this is a clear negative for trade negotiations.Shortly after the renminbi’s sharp depreciation on Monday, the US Treasury Department labelled China a currency manipulator. This is the first time in 25 years that the US government has designated a country as a currency manipulator.According to the US Treasury Department, the decision was triggered by the perceived lack of action by the PBoC to resist the renminbi depreciation. Given that the US...

Trade tensions are likely to hold the key to the longer-term outlook for EM currencies.Our EM FX scorecard ranks 10 EM currencies according to key criteria such as growth and vulnerability to external shocks. There have been few changes over the past month. The scorecard shows the Brazilian real as the most attractive EM currency over the coming 12 months.EM currencies have generally been weak recently for a combination of reasons. This has led to the relative outperformance of ‘defensive’...

The USD has recovered against the euro of late, but the greenback could soon run out of steam.The US dollar has appreciated against the euro since 8 September and is getting close to our short-term forecast of USD1.15 per EUR. This recovery has been mainly driven by supportive US data, monetary policy divergence and hopes of tax reform.In the short term, robust US economic activity, a Fed that is still in rate-hiking mode and the still broadly negative sentiment surrounding the US dollar (as...

After a period of currency strength linked to the revival in oil prices last year, the Norwegian krone and Canadian dollar may find it harder to make further advances in 2017.In 2016, the sharp rebound in oil prices and the November OPEC deal to cut oil production have been supportive of oil-producer currencies like the Norwegian krone and Canadian dollar. However, we believe the oil price is likely to stabilise at around USD55 in 2017, close to where it already is. In an environment where...