17 Jan 2014
Flash: GBP/USD, AUD/USD exposed to downside risks - Societe Generale
FXstreet.com (Bali) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, provides his insights in the state of market conditions.
Key Quotes
"Two questions from the weekly - At what point this year will US rates start to out-strip the forward implied path of US rates? If/when that happens, it will be disruptive for risk assets and bullish the dollar. And, will balance of payments trends continue to dominate the FX market? Put the together, answer 'yes' and you have a recipe for GBP/USD, AUD/USD to fall, USD/CAD and USD/JPY to rise."
"Or you could take the carry that is offered by the front end of the European market and receive that vs the US. Meanwhile, commodity currencies will stay under pressure. The Australian hangover following the long commodity boom is becoming more acute. The Bank of Canada will signal an easier monetary policy later this month."
Key Quotes
"Two questions from the weekly - At what point this year will US rates start to out-strip the forward implied path of US rates? If/when that happens, it will be disruptive for risk assets and bullish the dollar. And, will balance of payments trends continue to dominate the FX market? Put the together, answer 'yes' and you have a recipe for GBP/USD, AUD/USD to fall, USD/CAD and USD/JPY to rise."
"Or you could take the carry that is offered by the front end of the European market and receive that vs the US. Meanwhile, commodity currencies will stay under pressure. The Australian hangover following the long commodity boom is becoming more acute. The Bank of Canada will signal an easier monetary policy later this month."