9 Dec 2014
Bullish outlook for USD in 2015 – JPM
FXStreet (Barcelona) - Jan Loeys of J.P.Morgan remains bullish on the USD as he believes that many aspects of the macro landscape are still not priced in by the currency.
Key Quotes
“Our USD index (JPMQUSD) continues to make new highs, aided this week by a 10bp blast higher in US 2-yr rates. We, like almost everyone, remain bullish on the currency on a view that many aspects of the macro landscape are not yet in the price.”
“One is the Fed's dots, which look increasingly realistic after today's payrolls report. Two others are the BoJ's long-term easing program and the ECB's €3trn balance sheet intention. A fourth is a risk premium in commodity currencies for the possibility that China growth slows below 7%. For all these reasons, we do not think everything is discounted and the dollar can move higher.”
“We have been long vs currencies like EUR, JPY, GBP, AUD and NZD since late summer and carried those recommendations into our 2015 year-ahead outlook published last week. Though EM currencies have cheapened a lot over the past year and some countries have raised interest rates, these will probably not escape the damage which a mispriced Fed outlook does through higher volatility.”
Key Quotes
“Our USD index (JPMQUSD) continues to make new highs, aided this week by a 10bp blast higher in US 2-yr rates. We, like almost everyone, remain bullish on the currency on a view that many aspects of the macro landscape are not yet in the price.”
“One is the Fed's dots, which look increasingly realistic after today's payrolls report. Two others are the BoJ's long-term easing program and the ECB's €3trn balance sheet intention. A fourth is a risk premium in commodity currencies for the possibility that China growth slows below 7%. For all these reasons, we do not think everything is discounted and the dollar can move higher.”
“We have been long vs currencies like EUR, JPY, GBP, AUD and NZD since late summer and carried those recommendations into our 2015 year-ahead outlook published last week. Though EM currencies have cheapened a lot over the past year and some countries have raised interest rates, these will probably not escape the damage which a mispriced Fed outlook does through higher volatility.”