We are looking for 110 yen in three months, and we could well hit 100 yen later this year.
"Jens Nordvig" is a Danish-born economist specializing in foreign exchange markets and macroeconomic policy.
More Jens Nordvig on Wikipedia.We also judge that the dollar is vulnerable from a structural perspective. External imbalances in the U.S. are not a key market focus at the moment, but this could change on signs of weakening flow support.
Under normal circumstances with this kind of figure, you would expect to see significant dollar weakening. The fact that you're not seeing that seems to indicate that people have quite a bit of appetite to take on long dollar positions.
Japanese interest rates continue to price in tightening from the Bank of Japan. We think it's a bit premature, but the currency market is taking notice.
People were pricing in some kind of China revaluation and we had one, but it was very small. So there was disappointment with the degree of the China move.
The dollar is going to have a hard time. Investor expectations for the Fed will run out of steam.
The thing to watch now, once the 15 minutes' 'noise' after the number is out of the way, is whether there will be a resumption of the weak dollar trend.
A further significant upward shift in rate expectations seems unlikely in the near term given the current Fed language and the uncertainty about the strength of the data ahead of the March meeting.
This trend where the Chilean peso has weakened with Brazil and Mexico doesn't really have anything to do with Chile at all. We think it's a very good entry point.
Copyright © 2024 Electric Goat Media. All Rights Reserved.