25 Jul 2013
Flash: In need to find new catalysts to drive Yen, Pound trends - ANZ
FXstreet.com (Barcelona) - Richard Yetsenga, Head of Global Markets Research for ANZ, and his work-colleague Andrew Salter,
FX strategist, have examined a range of growth measures across the global economy, in an attempt to come up with some
directional currency conclusions, or at the minimum, identify risks to some of the consensus views.
Conclusions
"China comes out of this examination in the poorest shape. While rates of growth are still high, the data has been surprising on the downside, and expectations for growth are seeing large downward revisions. This supports our view for some CNY depreciation."
"The UK and Japan come out on the best shape. While absolute rates of growth are not particularly stellar, Japan is forecast to grow faster than the US this year, and the UK is forecast in 2014 to have its best year since the crisis. On top of this, both economies are in the midst of a strong run of upside surprises."
"While currencies are driven by a broader range of factors than just relative growth, the very strong expectations for depreciation in both the yen and the pound would seem to be on fragile ground. Certainly we expect further yen depreciation, but we feel that the market will need to find a new catalyst to drive this trend."
FX strategist, have examined a range of growth measures across the global economy, in an attempt to come up with some
directional currency conclusions, or at the minimum, identify risks to some of the consensus views.
Conclusions
"China comes out of this examination in the poorest shape. While rates of growth are still high, the data has been surprising on the downside, and expectations for growth are seeing large downward revisions. This supports our view for some CNY depreciation."
"The UK and Japan come out on the best shape. While absolute rates of growth are not particularly stellar, Japan is forecast to grow faster than the US this year, and the UK is forecast in 2014 to have its best year since the crisis. On top of this, both economies are in the midst of a strong run of upside surprises."
"While currencies are driven by a broader range of factors than just relative growth, the very strong expectations for depreciation in both the yen and the pound would seem to be on fragile ground. Certainly we expect further yen depreciation, but we feel that the market will need to find a new catalyst to drive this trend."