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26 Feb 2015
USD continuing to receive and image upgrade – ANZ
FXStreet (Barcelona) - Richard Yetsenga, Global Head of Financial Markets Research at ANZ, explains the reasons behind retaining a positive bias for USD.
Key Quotes
“Consider the news events of note since the beginning of the year:
Easings from a range of central banks – which now numbers close to 20 by our count;
Concerns about the creditworthiness of 1MDB in Malaysia;
For the euro area – the ongoing focus on Greece;
The apparent acceleration in capital outflows from China; and
Some press reports questioning the longevity of Australia’s AAA credit rating.”
“Perhaps the only country competing with the US for an image upgrade is India.”
“As such, strategically we retain a strong USD bias.”
“The upward correction in oil prices and signalling that the Fed retains some uncertainty about the broader environment and hence caution over the timing of the first rate hike, are contributing to what has been a rangy and idiosyncratic tone to currency markets.”
“More broadly however, US economic outperformance is still strong, US monetary conditions are tightening, and sensitivity to tighter USD liquidity remains high (particularly in emerging markets).”
Key Quotes
“Consider the news events of note since the beginning of the year:
Easings from a range of central banks – which now numbers close to 20 by our count;
Concerns about the creditworthiness of 1MDB in Malaysia;
For the euro area – the ongoing focus on Greece;
The apparent acceleration in capital outflows from China; and
Some press reports questioning the longevity of Australia’s AAA credit rating.”
“Perhaps the only country competing with the US for an image upgrade is India.”
“As such, strategically we retain a strong USD bias.”
“The upward correction in oil prices and signalling that the Fed retains some uncertainty about the broader environment and hence caution over the timing of the first rate hike, are contributing to what has been a rangy and idiosyncratic tone to currency markets.”
“More broadly however, US economic outperformance is still strong, US monetary conditions are tightening, and sensitivity to tighter USD liquidity remains high (particularly in emerging markets).”