FX markets were relatively stable over the last month despite increased uncertainties. In our view, the struggle for direction in FX is likely to continue near-term. However, longer-term FX fundamentals are taking shape.
While currency markets struggle to find direction in the near-term, longer-term FX factors are starting to take shape. One is the development of relative inflation performance and the impact on purchasing power parity.
The USD bounced on the back of the Fed meeting. Still, risky markets remain optimistic about future growth, while interest-rate markets have become pessimistic.
The USD declined further in May as vaccination and recovery momentum increased in other economies. ...
The USD fell back in April as the rise in US interest rates faded. No strong trend has yet emerged and the balance of strategies leaves a mixed picture.
The USD strengthened in March on the back of improved economic sentiment and rising bond yields. The QCAM FX BIAS product captured the USD rally well.
News over the last month were on balance growth friendly and lifted risky assets but inflation concerns also raised bond yields.
QCAM Insight After the selloff in 2020, the USD started firmer in 2021 amid increased financial market volatility. Several factors support the USD
The deployment of Corona vaccines is widely expected to reflate the global economy in 2021. The big risk is that the vaccination campaign disappoints.
QCAM Special The business cycle is an important exchange rate driver. At QCAM we have been using business surveys for many years to systematically capture the link between business cycles and exchange rate trends. This rule-based approach is now available as a total return alpha strategy via a UBS certificate. QCAM FX BIAS is diversified over 8 major currencies and delivers attractive returns at moderate volatility and low correlation with FX risk factors.
