G10 FX Forecasts - New Special Report out now
20/Jan/2016 • Currency Updates•
Persistently low oil prices and a global economic slowdown brought about by declining economic growth in China have put increasing pressure on every G10 economy in the past few months. The US, however, has weathered the storm relatively well and appears less affected than its G10 peers, having hiked its benchmark interest rate in December for the first time in nine years.
Here are a few key findings:
Gloom envelops oil-dependent currencies
An over 70% drop in oil prices in just 18 months has sent the Norwegian Krone and Canadian Dollar to multi-year lows, while also preventing any meaningful pick-up in headline inflation across the board.
Flight to safe-haven currencies
Recent market turmoil in China has increased the appetite for safe-haven currencies, namely the Japanese Yen, Swiss Franc and, to a lesser extent, the US Dollar.
US Dollar strength
The US Dollar is set to continue its upward trend throughout 2016 as long as the pace and timing of future interest rate hikes in the US turns out as we expect, which is roughly once a quarter. These rate increases will, in turn, depend heavily on economic data out of the US, particularly the labour market.
Download the full G10 report, including forecasts by Ebury Chief Risk Officer and Bloomberg forecaster Enrique Diaz-Alvarez.