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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.