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Forex market in 2017 and beyond - Political factors will continue to play the leading role

 

The essential

Idiosyncratic factors and political events (Brexit, US elections) played a major role in forex markets replacing monetary policy of major central banks as the main determinant of exchange rates as it was the case in the past years.

The consequences of political ruptures in 2016 will continue to be felt in the foreign exchange market in 2017. The dollar is expected to temporally benefit from long-term interest rates divergences and monetary policy between the United States and major advanced economies. That said, unless the new US administration unveils a large fiscal stimulus plan, it is unlikely that the long-term interest rates divergence to continue indefinitely in 2017. Over the course of the year, we assess rising risks could emerge for the euro due to a progressive rise in inflation and the likely resurgence of issues about the duration of the ECB’s quantitative easing programme.

CROSS ASSET (Download)

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November 2016

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November 2016

The Article

L'Article

 

The renminbi – the challenges of a future international currencys

In the future, the Chinese currency (RMB) will undoubtedly be an international currency, playing a major role in Asia, as the US dollar and euro do in their respective zones. Competing with the dollar on the international level will take much longer, and it is a highly ambitious goal.

PHILIPPE Ithurbide,

Global Head of Research, Strategy and Analysis

 

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En savoir plus

 

DRUT Bastien , Fixed Income and FX Strategy
FORTES Roberta , Fixed Income and FX Strategy
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Forex market in 2017 and beyond - Political factors will continue to play the leading role
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