'Market still does not believe in Grexit' - Adam Narczewski, XTB Poland

 Adam
Narczewski

PROFILE:
• Current Job: Deputy Regional Director at XTB Poland
• Career: Market analyst at XTB Poland. Frequent guest of TV shows on TVN CNBC, CNBC Europe & World, Polsat News.

View profile at FXStreet

Adam Narczewski is currently the Deputy Regional Director and a market analyst at XTB Poland. He has explored the secrets of finance at Winthrop University in South Carolina (USA) where he acquired invaluable experience. He specializes in international markets, fundamental analysis and practical application of options and in investing. Trades forex on international markets and stocks on the Warsaw Stock Exchange. Adam is a candidate to the CFA designation, also a speaker on seminars regarding structured instruments, financial engineering and advanced financial instruments. Adam is a frequent guest of television programs in Poland - TV Biznes, TVN CNBC, CNBC Europe & World, Polsat News and radio show.

Next week, we have a new Fed Meeting coming. The interest rate hike expectations seem to be delaying, when do you forecast the Fed to raise the rates?

The base scenario for an interest hike is September. I belive the market is expecting the same. The published macro data for March from the U.S economy do not show such an improvement as I was expecting so the probability for an interest rate hike in June is very low.

How much of an eventual Grexit do you think is already discounted in the EUR value? Do you foresee the EUR/USD reaching parity or below during the next month? 

This is a tough one. It is really hard to say to what degree an eventual Grexit is already priced in the EUR. The market still does not believe in it as the base scenario meaning it sees Greece remaining in the Eurozone. But sure, if the Grexit materializes, then the EUR/USD could reach the parity area, at least for a moment.

Do you expect the GBP/USD to experience a bearish run on the upcoming UK election?

The lack of a coalition after the elections in the UK could cause uncertainty which in turn a weaker GBP. The British Pound could also weaken just before the elections. Taking into account the state of the British economy though, the weakness should be temporary. Those counting on the BoE to increase rates by the end of the year, could take advantage of a lower GBP/USD rate and buy Pounds.

Do you see the USD/JPY extending gains or the USD weakness pressuring pair to the downside?

The USD/JPY should be stable. The Bank of Japan is satisfied with the current level so I do not expect any interventions. Additionally, the bull market on equities stops the USD/JPY to fall while the coming interest rare hike by the FED stops the possible gains. I expect the USD/JPY to remain in a stable 118 - 121 range.

USD/CAD has fallen 500 pips from March highs of 1.2750 amid USD weakness; as the pair recovered from 1.2000 to trade at 1.2250, do you see more correction or an extension in the bearish move?

Oh yes, the USD/CAD has been a great pair to trade in the last couple of weeks. Now, if macro data from the U.S is positive and oil prices end their upward corrective movement, the USD/CAD can be back on its way up north. Sure, the Bank of Canada has not changed interest rates and sent a pretty hawkish statement but if WTI oil prices do not increase over the 60-65 USD per barrel level, statements made by the BoC could become more dovish again.