I have compiled a list based on their respective economic outlook from recent economic indicators and news releases. USD is excluded it is considered more as a safe-haven and the “new carry” currency… U.S. economic outlook might not have much influence on the direction of USD, and as a matter of fact we might see a scenario of USD vs ALL Majors in the near term.
As far as USD being the “new carry” currency, just check the 3-month LIBOR rate, you’ll see that USD is at 0.29%, GBP at 0.57%, EUR at 0.72%, and JPY at 0.35%. With USD being the lowest cost currency to borrow from, it makes sense to see further decline of USD, and it will remain so until the actual overnight rate starts to rise.
Well, here is the list of the long term outlook, from the Strongest to the Weakest (remember these are long-term outlook, not short-term outlook. This is what I would look to keep my analysis straight):
STR = Strong, MID = Medium or Neutral, WKR = Weak
- (STR) AUD – Remains Unchanged with last week’s analysis – “Excellent Outlook due to its economy and strong ties with China. Possible range by the end of 2009 is over 0.9000”
- (MID STR) CAD – Starts to show signs of weakness as commodities start to consolidate. However it is still a strong currency with sound economic outlook.
- (MID) CHF – SNB kept rates unchanged. SNB not worries at the moment as CHF is not overly strong… Remains Neutral.
- (MID) JPY – Some news out of Japan caused JPY to drop quickly from 90 to 91.50 last week. Likely we have seen a bottom at 90.00
- (MID WKR) NZD – Remain Unchanged with last week’s analysis – “Not a good fundamental outlook and overvalued as it is… but may still benefit from risk appetite sentiment and strong AUD. Governor Bollard explicitly stated that NZD/USD should be at 0.6200 area, and it is over 0.7000… so go figure.”
- (WKR) EUR – gained over the weakness on USD. If USD remains under pressure, EUR may gain further, but its economic outlook is still worse compared to that of the U.S.
- (WKR WKR) GBP – Weakness starts to show, fundamentally unsound. Expect to see further downward acceleration in the weeks or months to come.
Related posts:
- Forex Fundamental Economic Outlook 08/10/09
- Market Economic Outlook as of 10/12/09
- US CPI m/m 10/15/09
- RBA Cash Rate Decision 11/02/09
- UK MPC Meeting Minutes 08/19/09
- Open letter concerning Sterling’s Reversal – (copied from my newsletter)
- Forex News and Market Trend Wrap-up – Thanksgiving Week, Dubai World, UAE Support, JPY Strength…
- Forex News Trading – Fundamental Analysis & Technical Analysis
- Forex News Analysis AU RBA Interest Rate 07/05/11
- Forex News Trading AU RBA Interest Rate 05/03/11
