USD, EUR, JPY, GBP, AUD: Forecast for next week – Morgan Stanley
USD: breath … The upward trend ..
US data remain soft as a result of seasonal factors and labor data. In addition, the Fed may sound a rate hike at the last meeting. This combination can lead to USD pause before wage data. we prefer to wait for dips in USD. Nevertheless, we expect wage growth and the Fed hike, so we maintain our medium-term bullish view on USD, and will use the dips to restore long-term Long positions.
EUR: remains bearish. Downtrend.
We remain bearish on the EURUSD and we believe that this trend will continue after a short break … after a meeting of the FOMC. Concerns over Greece remain, and the latest round of European elections suggests a fragmented political landscape, which can be reflected in the results of the national elections in many countries at the end of the year. Political uncertainty is likely to put pressure on the euro.
JPY: bright image. Uptrend.
We believe that the USDJPY has a tendency to decrease in the immediate prospects. Firstly, the appetite for risk waned due to the political tensions in the Middle East, and evaluation in the stock markets. Secondly, we are seeing signs of reflation in Japan. Wages and the economy somewhat stronger. The combination of these two factors has put pressure on USDJPY. JPY especially attractive on the crosses.
GBP: remains bearish. Downtrend.
During the coming week, we are continuing to monitor the EURGBP, waiting for a technical correction higher. This contributes to the low risk appetite, causing investors to reduce the inflow of capital into the UK, keeping the currency weak .. With CPI hitting a low 0,0% Y, is now a growing risk that the UK plunges into deflation in the coming months. We support the view that in order to sell on GBPUSD rebounds. Political risks remain.
AUD: temporary relief. Downtrend.
We maintain our bearish outlook for AUD in the medium term, but recognize that the USD pause may provide some support to such currencies as the AUD. Pause in the usd can also offer a moment of relief for countries in Asia, which will further contribute to the auditorium. However, in the medium term, we maintain our bearish outlook. Our team lowered its forecasts for iron ore in recent years, does not bode well in the long term for the currency pair AUD.
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