Adjusting G10 FX forecasts - Nomura

Analysts at Nomura offered a snapshot of their FX G10 forecast.

Key Quotes:

"USD: We believe rising expectations of policy normalisation outside the US, twin deficits and a lack of equity inflows into the US will weigh on the dollar. We remain comfortable maintaining a multi-year downtrend in our USD forecasts. 

EUR: Range trading of EUR/USD will continue in the near future. However, we still firmly expect EUR appreciation to re-accelerate in 2019, as we expect the ECB to start raising rates in Q3. 

GBP: We expect an eventual Brexit deal and strong data momentum to support GBP. 

CHF: The near-term trend will be influenced by Italian politics, but we expect the SNB’s cautious stance to prevent CHF appreciation. Gradual CHF weakness is likely. 

SEK: Riksbank normalisation should support EUR/SEK downside in the near term, but we remain cautious on the future growth outlook for Sweden. 

NOK: We think domestic and external tailwinds are ebbing, thus we have become less constructive on NOK. 

CAD: While the announcement of the USMCA agreement has removed some uncertainty for the BoC, we still think further CAD upside is limited. 

AUD: Some bad news is already in the price, but we see AUD grinding lower with China slowing – slowly – and EM wobbles continuing as DM policy normalisation progresses. A patient RBA and expected easing of bulk commodity prices are also headwinds. 

NZD: We don’t expect an RBNZ rate cut, but expect the RBNZ to maintain a cautious tone, which will continue to weigh on the Kiwi. 

JPY: The BOJ’s forward guidance has diminished BOJ normalisation expectations and JPY weakness could continue, with strong foreign investment by Japanese investors."