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Emerging-market currency scorecard

Our EM FX scorecard ranks 10 EM currencies according to key criteria such as growth and vulnerability to external shocks. There have been few changes over the past month. The scorecard shows the Brazilian real as the most attractive EM currency over the coming 12 months. EM currencies have generally been weak recently for a combination of […]

Gold price to remain trendless

The recent strength of the US dollar coupled with the rise of the US 10-year Treasury yield has weighed on the price of gold and silver. Since 19 April, gold has lost roughly 2.3%, while silver lost almost 4.5% in USD terms. At the start of the year, these two drivers were sending conflicting signals: […]

Euro weakness should prove temporary

Over the past 10 days, the euro has declined significantly against the US dollar. On 26 April, the EUR/USD rate moved below the low of its 1.2150-1.2550 trading range, which had been in place since 18 January. Reasons for this decline can be found in the growth differential and monetary policy divergence. Indeed, moderation in […]

Russian rouble: significantly undervalued but quite risky

On 6 April, the Trump Administration announced additional and more severe sanctions against Russia “in response to the totality of the Russian government’s ongoing and increasingly brazen pattern of malign activity around the world”. These sanctions confirm a tougher stance of the US Congress against Russia. Following the announcement, the Russian rouble depreciated significantly against […]

The Brazilian real and Russian rouble are still the most attractive EM currencies

Our Emerging Market (EM) FX scorecard, designed to assess the attractiveness of a given currency over the coming 12 months, ranks 10 EM currencies according to key criteria such as growth and vulnerability to external shocks. There have been few changes over the past month. EM currencies have been resilient thus far in 2018, despite […]

British pound – Smoother transition, stronger sterling

The transitional deal reached between the UK and the European Union (EU) on 20 March and the strong job market report on 21 March plead for a more positive short-term outlook for sterling than previously thought. We are therefore revising our projections upward for sterling over the next three, six and 12 months versus the […]

The Brazilian real and Russian rouble are still the most attractive EM currencies

Our Emerging Market (EM) FX scorecard, designed to assess the attractiveness of a given currency over the coming 12 months, ranks 10 EM currencies according to key criteria such as growth and vulnerability to external shocks. There have been only few changes over the past month. Our EM FX scorecard still shows the Brazilian real […]

Less scope for yen and Swiss franc depreciation

The start of the year has seen the Japanese yen and Swiss franc appreciate strongly against the US dollar (they rose by 5.6% and 4.4% respectively between 1 January and 22 February) despite higher US yields. However, this rise in US yields came with heightened market volatility, favouring safe-haven currencies such as the yen and […]

Our emerging market currencies scorecard gives good marks to real and rouble

Our Emerging Market (EM) FX scorecard, designed to assess the attractiveness of a given currency over the coming 12 months, ranks 10 EM currencies according to key criteria. The indicators we singled out to analyse the relative attractiveness of EM currencies are growth, inflation, valuation, carry, vulnerability to external shocks, trade and idiosyncratic drivers. All […]

US dollar: down but not out

Given the boost to US growth from the tax cuts, one might ask why, between the ratification by the US Congress of the Trump tax cuts on 19 December and 26 January, the US dollar index lost roughly 4.6%. We see two key drivers behind recent dollar weakness: the growth differential between the US and […]

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