FXstreet.com (Barcelona) - Nick Bennenbroek, Head of Currency Strategy at Wells Fargo has taken a look at how a tumble off the fiscal cliff could impact currency markets.

He begins by noting that global equities could under some pressure in the coming weeks, which will likely also weigh on many foreign currencies. Though the US Presidential election has been decided, Bennenbroek notes that investors have promptly turned their attention to the looming fiscal cliff. He believes that this has increased market uncertainty following the election.

He notes that emerging European currencies could be especially vulnerable, alongside Australian, Canadian and NZ Dollars and the Mexican Peso. Finally he also highlights the Swedish Krona and the Brazilian Real as also likely being impacted.

Looking ahead he suggests that those with immediate hedging needs should consider doing so at current levels and for investors, his short term bias view is for short positions in the currencies listed above, either against USD or JPY.