18 May 2015
EM FX strength to fade towards year-end – JP Morgan
FXStreet (Edinburgh) - Analysts at JP Morgan believe the EM space could lose ground by the end of the current year.
Key Quotes
“We remain cautious on emerging market currencies and expect the EMCI index to fall about 4% by year-end”.
“Although EM FX has outperformed since mid-March, we believe this is unlikely to be sustained in the lead up to Fed lift-off”.
“Regarding USD/CNY, while the balance of payments data suggests FX outflows continued through Q1, we believe they will be contained by PBoC intervention”.
“The recent stability is partially motivated by the desire to promote RMB as a global reserve currency, especially given ongoing discussions regarding SDR inclusion”
Key Quotes
“We remain cautious on emerging market currencies and expect the EMCI index to fall about 4% by year-end”.
“Although EM FX has outperformed since mid-March, we believe this is unlikely to be sustained in the lead up to Fed lift-off”.
“Regarding USD/CNY, while the balance of payments data suggests FX outflows continued through Q1, we believe they will be contained by PBoC intervention”.
“The recent stability is partially motivated by the desire to promote RMB as a global reserve currency, especially given ongoing discussions regarding SDR inclusion”