USD has likely peaked – Standard Chartered
Analysts at Standard Chartered believe the USD has likely peaked and while the Fed is likely to continue hiking interest rates, we believe that policy divergence is approaching extremes.
Key Quotes
“If anything, the pivot towards reflation has been most apparent in Europe than in the US in the past two months. While the ECB continues to focus on benign core inflation at the moment, we question how long it could continue.”
“Against this backdrop, we doubt the USD will rise strongly from here. Indeed, we believe that the EUR has bottomed and is set to rally further in the coming weeks and months against the USD.”
“This backdrop for the USD explains why we are not suggesting that equity investors hedge the currency risks when it comes to Euro area equities and why we have become increasingly constructive on Asia ex-Japan equities and Emerging Market local currency bonds in recent months.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
