Highlights The pillars of dollar support continue to fall, but the missing catalyst is visibility on the trajectory of global growth. For now, we remain constructive on the DXY short term, but bearish longer term. Market internals…
Highlights The global economy is in the midst of a painful recession. Monetary and fiscal authorities are responding forcefully to the crisis, but the lengths of the lockouts and quarantines remain a major source of downside risk…
Recent market turbulence has called the yen’s safe-haven status into question. As the chart above highlights, there has been a clear breakdown between the performance of risk assets and the yen. The big change in the yen…
The Norwegian Krone was one of the great victims of the combined catastrophe created by both COVID-19 and the oil price collapse. Oddly, the Canadian dollar has been weak, but not nearly as much as the NOK. As a result, CAD/NOK…
EM currencies such as the BRL or the MXN made new all-time lows last week. Is it time to move capital into EM FX? Valuations are the best indicator of long-term returns for currencies. They are also a tool to gauge sentiment.…
Yesterday, BCA Research's Emerging Markets Strategy service continued to recommend shorting a basket of EM currencies – BRL, CLP, ZAR, IDR, PHP and KRW – versus the US dollar. The selloff in both global and EM…
The demand for the dollar to meet dollar-funding needs is so elevated right now that the dollar is rising unstoppably, no matter what policy the Fed announces. For example, the Fed expanded its swap line program yesterday with…
Dear clients, In addition to this short weekly report, you will also receive a Special Report penned by my colleague Jonathan LaBerge on Sweden, with implications for the SEK. I hope you will find the report both useful and insightful.…