BRL, ZAR and INR to suffer a big blow on a risk sentiment deterioration – Nordea
|Resurging COVID-19 cases and signs of recovery levelling off hints a risk-off period ahead. The BRL, ZAR and INR are among the most vulnerable currencies while the CNY also faces downside risks after the recent rally, according to Nordea’s Amy Yuan Zhuang.
Key quotes
“Worsening virus situation could deteriorate risk sentiment. The global virus curve is steepening and the number of daily new cases is rising. The BRL and INR are clearly the most vulnerable currencies here due to their rapidly rising number of infections. Should risk appetite deteriorate significantly, it will hit commodity prices as well. As commodity currencies, the BRL, ZAR and RUB will likely face a double whammy.”
“The CNY and the CNH face room for depreciation as well. The rally in early July, triggered by soaring stock prices, was too much and too fast. We think the downside risks on the renminbi will play out in the coming months when the US presidential election intensifies China bashing, and tensions between China and the other large countries start to be priced in.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.