Pacific Investment Management Co. is seeking to profit from declines in the Australian dollar and yen against the U.S. currency even after the Federal Reserve signaled it wasn’t in a hurry to raise borrowing costs.
Additional interest-rate cuts by the Reserve Bank of Australia and a slump in commodity prices, caused by a slowing Chinese economy, will weigh on the Aussie, Adam Bowe, a money manager at Pimco in Sydney, said in a report posted on the company’s website Friday in Tokyo. The risk the Bank of Japan will expand stimulus and that investors in the country will shift toward overseas stocks and bonds will cause the yen to weaken, he said.
“Our highest conviction views are in the currency markets, and we remain short the yen and the Australian dollar against a long U.S. dollar position,” Bowe said. “We still expect the macro environment to remain challenging in Asia.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.