Deutsche Bank, a leading global investment bank has made available its latest ‘FX Blueprint’ on the outlook for FX in 2010 on the dbFX.com website.
dbFX.com is Deutsche Bank's online margin forex trading platform for individuals and small institutions. As the world’s leading FX liquidity provider*, Deutsche Bank brings the benefits of the foreign exchange market to sophisticated retail clients and small institutions institutions on a state-of-the-art trading forex trading platform tailored to their individual needs.
As the report outlines, the next twelve months will see policymakers attempt to take back some of their unprecedented array of policy actions from the last two years. The positive pulse of global growth should allow some to delay and yet others to speed up the tightening of monetary or fiscal policy. Inflation and heightened concern over sovereign risk likely will force the hand of some. Determining which ones will be key for 2010.
The ‘FX Blueprint’ identifies 11 key themes for FX in 2010:
1. Against the Tide, Yen to Abide
2. Asia – Three Trades for the New Year
3. Boring Euro
4. Tougher Euro for AUD
5. The Canadian Catch-up
6. Naughty NOK & Steady SEK
7. Sterling – Staid, but Skewed
8. Swiss Roller Coaster
9. EMEA – The Long Fuse
10. Roadmap for the Rest of EMFX
11. dbCR – Keep Calm and Carry on
The first of the themes listed above, “Against the Tide, Yen to Abide”, looks at the outlook for Japan’s currency in 2010. By far the strongest consensus view for 2010 amongst G10 is a weaker yen, whether one looks at forecasts, trade recommendations or market positioning – but a number of factors could see a stronger yen go against the tide of popular opinion. Factors that could influence the outlook for the yen include a likely moderation in the rise in US yields – a decline in correlation with yields would support the yen on the upside. Historically the initiation of Fed tightening has shown a strong tendency to reverse the course of the USD/JPY and decline sharply.
Though many are concerned about Japan’s fiscal picture, it is worth remembering that a fiscal crisis is almost unheard of in current account surplus nations with deflation. Possible intervention is more or a risk, but even there history shows the yen strengthening during intervention phases, and one should not forget about last year’s CHF strength in the face of intervention.
For more information, please view the dbFX video entitled “Deutsche Bank FX Outlook for 2010” , which is available at dbFX.com.
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Thread: Up and away?
02-15-2010, 03:50 AM #1
Up and away?