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The British pound is set to fall by as much as 15% by the end of 2017 according to Guy Petcho of Voya Investment Management.
Petcho, who formerly was a part of George Soros’ investing team, said in an interview with Reuters on Friday that a turn for the worse in UK economic growth will prevent the Bank of England from raising interest rates, which will markedly reduce sterling’s attractiveness. View article >
Officials at the Bank of Japan (BoJ) said today that they were pushing back the time frame for achieving their 2% inflation target to the end of 2019, marking yet another defeat in the bank’s long-term battle against deflation.
When the target was introduced by BoJ Governor Haruhiko Kuroda in 2013, it was forecast that it would be achieved in 2015, but four years later, with the prevailing inflation and ‘core’ inflation rates in Japan at 0.4% and 0.0% respectively, there is little sign that the inflation outlook is improving. View article >
Oh dear. What a mess.
So much had been hoped for the US dollar in 2017 but how those mighty hopes have fallen.
The US dollar fell sharply on Friday, adding to what has already been a pretty horrible year for America’s currency. Of special note were USD/THB, USD/SGD, USD/AUD, USD/GBP, USD/CAD and the US Dollar Index, which all fell to long-term lows. View article >
The Singapore dollar fell on Friday morning following worse than expected GDP data.
Singapore’s Ministry of Trade and Industry said that the economy expanded 0.4% in the second quarter, which equates to annualized growth of 2.5%. These numbers fell short of the market forecasts for 1.1% and 2.8% for quarterly and annualized growth respectively.
Singapore’s economy performed significantly better in the second quarter than in the first, in which the economy contracted by 1.9%. View article >
The Korean won gained nearly 1% against the US dollar yesterday and by doing so recorded its best day since April. USD/KRW ended the New York session at 1137.4. The move took the won’s 2017 gain against the dollar to 6%.
Against the euro, the won gained 1.4% – its best day since November – but the currency remains weak by recent standards and remains down on the year having suffered in the presence of a broad euro uptrend which began in April. View article >
The New Zealand dollar continued yesterday to retrace its broad May-June uptrend, falling to a one-month low against the British pound and euro, and to a three-month low against the Canadian dollar.
NZD/GBP, NZD/EUR and NZD/CAD fell to 0.5583, 0.6293 and 0.9305 respectively.
Although the kiwi has fallen across the board in recent weeks, it is unsurprising that it has fallen most against the three aforementioned currencies, each of which has a new hawkish backstory, especially the Canadian dollar which is supported by a central bank that is expected to raise interest rates today (Wednesday July-12, 14:00 GMT). View article >
Thailand’s baht remains one of Asia’s best performing currencies this year.
Against the US dollar, the baht has gained more than 5% in 2017 and is now buying $0.029, putting it back at 2015 levels.
Against the Japanese yen, although the baht has gained only half as much in percentage terms as it has against the dollar, today’s rate of ¥3.346 marks a seventeen-month high in the baht’s buying power. View article >
The Bank of Japan (BoJ) are in a battle to maintain extreme levels of monetary policy stimulus – a battle which, to win, must necessarily weaken the Japanese yen.
On Friday, the yen locked in its fourth consecutive weekly loss against the US dollar, its seventh such loss against the New Zealand dollar, and it fell to a seventeen-month low against the euro. View article >
Ahead of today’s US non-farm payrolls data, the Hong Kong dollar’s fall continues unabated. This week the currency is holding above 7.81 against the US dollar and reached an eighteen-month low (a USD/HKD high) on Monday of 7.8140.
Hong Kong dollar weakness continues to be driven by the ever-widening gap between local and US interbank interest rates.
At the start of 2017, three-month Hibor (Hong Kong rates) and three-month Libor (US rates) stood at similar levels, but by the end of June Libor held a 52 basis point premium over Hibor, which of course has driven funds out of Hong Kong dollar deposits and into the higher-yielding US dollar. View article >
Dutch bank ABN Amro have this week upgraded their forecast for the Indian rupee. The bank now believes that the year will end with the rupee buying 0.0155 US dollars (USD/INR 64.5), and while this is not a significant increase on the rupee’s current valuation at 0.0154 (USD/INR 65.0), it marks a significant upward revision to the bank’s previous forecast of 0.0148 (USD/INR 67.5). View article >