Highlights The current burst of inflation in developed economies is due to a (negative) supply shock rather than a (positive) demand shock. Consumer complaints of “poor buying conditions” mean that higher prices will cause…
BCA Research’s Foreign Exchange strategists maintain a bearish outlook for the US dollar. US growth momentum is starting to rotate away from the US to other economies. Meanwhile, central banks are beginning to shift towards…
Highlights The kiwi will continue to benefit from a pandemic-free recovery and normalization in monetary policy from the RBNZ. However, the kiwi is becoming expensive according to most of our models. This will begin to impact growth…
Dear client, Next week, in lieu of our weekly report, I will be hosting a webcast on Thursday, March 25 at 10:00 am EDT and Friday March 26 at 9:00 am HKT. I look forward to your comments and questions during the webcast. Best regards…
Highlights A blue wave will likely supercharge the dollar’s downtrend in 2021. The key beneficiaries of this decline will be the much undervalued Scandinavian currencies, as well as those of commodity-producing countries. The…
Highlights Inflation Breakeven Trades: We are taking profits on our recommended inflation breakeven widening trades in Italy and Canada, as breakevens in both countries are no longer below the fair values implied by our models. We are…
Highlights While the bull market in the Australian dollar might pause temporarily, it will advance further this cycle. The key catalyst for the AUD is an improving balance-of-payments backdrop. Despite its explosive rise, the…
Highlights We remain bearish on the US dollar over the next 12 months. The best vehicle to express this view continues to be the Scandinavian currencies (NOK and SEK). Precious metals remain a buy so long as the dollar faces downside…
Highlights When it comes to a beauty contest among currencies, the US dollar is a winner right now. Significant dollar moves tend to occur in very long cycles. When – and only when – the crisis ends will the dollar begin…
Highlights Most currency pairs continue to trade toward the apex of tight wedge formations. History suggests major breakouts could be imminent. While the trade-weighted dollar has historically tended to be the best performing…