30 Apr 2014
USD expected to keep its broad range - ANZ
FXStreet (Bali) - According to the ANZ FX Strategy Team, the USD is expected to be confined within its broad range as long bond yields remain capped.
Key Quotes
"The theme from the US remains one of benign growth, ie not fast enough to drive a USD surge, but equally, strong enough for a USD surge to remain a prospect. This should continue to add pressure to consensus trades which are negative carry."
"That said, the pre-conditions for triggering a more systemic sell-off in markets remain absent. While the indiscriminate risk rally has run its course and naïve carry strategies will struggle, volatility remains extremely low and in this environment we advise investors to focus on currencies where growth prospects are improving, structural reform momentum is positive, and valuation does not pose a significant barrier."
Key Quotes
"The theme from the US remains one of benign growth, ie not fast enough to drive a USD surge, but equally, strong enough for a USD surge to remain a prospect. This should continue to add pressure to consensus trades which are negative carry."
"That said, the pre-conditions for triggering a more systemic sell-off in markets remain absent. While the indiscriminate risk rally has run its course and naïve carry strategies will struggle, volatility remains extremely low and in this environment we advise investors to focus on currencies where growth prospects are improving, structural reform momentum is positive, and valuation does not pose a significant barrier."