Germany: Recession Looming
What does this mean for ECB interest rates? One thing is sure - it will be harder for the ECB to hike rates further. Furthermore, the “north-south” tensions in Euroland will evaporate as the conflicting interests of the “hardliners” in the north (with relatively moderate inflation and high activity) and…
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Long Term View Analysis on GBP/USD
This GBP/USD monthly chart displays our long term view of the pair, with cycles and classical chart analysis both visible. As in our EUR/USD long term cycle analysis, we can clearly see two approximate cycles; the first being a four year series separating the major lows and the second being…
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Euro/Dollar 2008 Q3 Outlook
One of the most dominant trends in the financial markets in the first half of 2008 has been relentless US dollar weakness. Not only did the movements in the greenback impact the values of many currencies around the world, but the dollar has also contributed significantly to the rally in…
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Japanese Yen 2008 Q3 Outlook
The Japanese Yen saw a clear reversal of fortunes in the second quarter, as the previous darling of tumultuous financial markets lost ground when global turmoil began to ease. The low-yielding currency had previously rallied strongly on what was a clear de-leveraging across risky asset classes, but a return to…
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British Pound 2008 Q3 Outlook
The second quarter of 2008 marked yet another extended period of consolidation for the British pound as the currency simply range traded between 1.94 and 1.98 for the majority of the time. In fact, the currency ended little changed from the start of April, and for that matter, the beginning…
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Swiss Franc 2008 Q3 Outlook
The slowdown in the U.S. and a weakening European economy are beginning to weigh considerably on Swiss growth. Furthermore, inflation concerns continue to mount as energy and raw material costs reached record highs during the past quarter. Yet, despite the upward pressure of rising prices, the SNB has decided to…
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Canadian Dollar 2008 Q3 Outlook
Following a rapid appreciation amid the subprime-fueled dollar selloff, the Canadian dollar settled into a range against its US counterpart, oscillating around parity between 1.0360 and 0.9740. This is not surprising given that nearly 80% of Canadian exports are destined for the US market, making Canada highly sensitive to the…
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Australian Dollar 2008 Q3 Outlook
Despite an ominous sense of uncertainty over the health of the credit markets, fading global growth and narrowing interest rate differentials, the Australian dollar managed to close out the second quarter at fresh 24-year highs against the benchmark US currency. AUDUSD strength was essentially universal as the currency exhibited incredible…
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New Zealand Dollar 2008 Q3 Outlook
In the second quarter of 2008, the New Zealand dollar fell sharply against the world’s most heavily traded currencies on speculation that the Reserve Bank of New Zealand would have to cut interest rates faster than traders had previously expected. Indeed, the rapid deterioration of the New Zealand economy prompted…
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FX Forecast Update: To Catch a Rising Tide
If the relative movements have been difficult to pin down, there is little confusion in our view when it comes to the absolute outlook. Since last autumn, we have warned about the dual shock of financial crisis and economic slowdown. There is still nothing to in-dicate that the financial crisis…
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