G20 to weigh on safe haven currencies – Danske Bank
|Piet P.H. Christiansen, senior analyst at Danske Bank, suggests that optimism on trade is boiling ahead of the G20 meeting in Osaka, which starts today is weighing on safe havens.
Key Quotes
“The USD has stabilised somewhat after the recent decline, while the CHF and JPY strength has faded a bit. Notably, EUR/CHF has edged away from the 1.10 area, which may foster SNB action, and USD/JPY climbed towards 108 yesterday. Some parts of the market seem to be pricing a positive outcome at G20 but inflation expectations remain in decline and global data is crucially still weakening.”
“We think USD/JPY continues to have significant downside risks. Indeed, while dollar weakening would help, it likely remains insignificant in terms of turning global macro around, and a trade war premium in USD as likely still present. If a trade truce is agreed by Trump and Xi this weekend, it might initially foster some USD, JPY and CHF weakness and cheer in notably the Scandies and EM but we do not see a long-lived move given (1) already high expectations, and (2) the risk that the US administration has proven it may swiftly change its mind again on these matters.”
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.