Despite large net-long speculative positions in EUR/USD and a substantial decline in German 5-year/5-year forward real rates relative to the US, the euro only softened marginally in the past two months. The euro’s resilience…
After having stagnated last year, the Chilean peso is recovering smartly, following copper prices higher. As the world’s top producer of the red metal, Chile’s currency typically benefits from favorable copper market…
BCA Research’s Foreign Exchange Strategy service concludes that a rise in global bond yields is not a reliable precursor to a stronger dollar, because the USD reacts to interest-rate differentials, rather than the level of…
Highlights A rise in global bond yields has rarely been a reliable precursor of a stronger dollar. This is because the dollar reacts to interest-rate differentials, rather than the level of global yields. Changes in the dollar…
At its Thursday meeting, Indonesia’s central bank cut its policy benchmark by 25 basis points and relaxed lending rules as it downgraded the economic outlook and trimmed its forecast for bank lending growth. The seven-day…
EM breakeven inflation rates have been steadily declining relative to the US. This is a very important dynamic. Flows into EM are very sensitive to the inflation outlook, and the perception of declining inflation risk invites…
Highlights The Canadian economy is usually a high-beta play on global growth. However, given the stop-and-go pattern of the pandemic, Canada might lag the global recovery for now. The Bank of Canada’s (BoC) stance will be to…
BCA Research’s Emerging Markets Strategy service concludes that the Turkish financial markets are currently in a sweet spot, but a long-lasting rally in the Turkish lira is unlikely. In the near term, this advantageous…
2021 has not been easy on the Japanese yen. USD/JPY bottomed on January 5, reflecting underwhelming dynamics in Japan’s domestic economy. The manufacturing PMI which was contracting for all of 2020, finally reached the 50…