19 Aug 2015
EM FX continues to suffer, USD would appreciate further – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank, has given her views on the EM space and the prospects for the greenback.
Key Quotes
“On the back of the China’s change of policy last week we have adjusted lower our CNY forecasts and look for a move towards USD/CNY6.70 on a 12 mth view”.
“While we had already been expecting the CNY to weaken the timing of China’s change of tact last week was a big surprise and unleashed shockwaves across the region”.
“The biggest Asian losers since last Tuesday are the MYR and the IDR, the former has already being undermined by political scandals and weak commodities, the latter by slow structural reform”.
“The fragility of EM markets supports the view that core currencies will remain well supported”.
“Consequently even though the current vulnerability in EM supports our view that the Fed could wait until December to hike rates, we remain of the view that the USD will be one of the better performing currencies over the next 12 month or so and would favour buying the greenback on dips”.
Key Quotes
“On the back of the China’s change of policy last week we have adjusted lower our CNY forecasts and look for a move towards USD/CNY6.70 on a 12 mth view”.
“While we had already been expecting the CNY to weaken the timing of China’s change of tact last week was a big surprise and unleashed shockwaves across the region”.
“The biggest Asian losers since last Tuesday are the MYR and the IDR, the former has already being undermined by political scandals and weak commodities, the latter by slow structural reform”.
“The fragility of EM markets supports the view that core currencies will remain well supported”.
“Consequently even though the current vulnerability in EM supports our view that the Fed could wait until December to hike rates, we remain of the view that the USD will be one of the better performing currencies over the next 12 month or so and would favour buying the greenback on dips”.