Can the euro bounce back? Will the EUR stage a rebound this year, as it did in 2017? Perhaps, but USD weakness will not be enough. More likely, the EUR will move in a relatively narrow range. Given the multiple uncertainties, it seems safer to wait for clear directional signals and not bet on opinions. Our view.
The macro perspective
Do markets know more than economists These days, markets are nervous about how the economy is trending. Fears of a possible imminent recession in the US are pulling prices lower. Economists, meanwhile, remain confident. But is the uncertainty in the markets now feeding into the real economy? Our thoughts.
FX market talk
The Japanese yen’s underlying strenght. The surge in the value of the Japanese yen on the first trading day of 2019 was a sharp reminder of the argument we have made here on numerous occasions: Ultimately, the fundamentals matter. We think the JPY continues to be cheap against a range of currencies, including the USD, EUR and CHF. Our assessment.