QCAM Insight
The outcome of the US election was again a surprise as the “Blue Wave” was not as strong as expected. Still, markets have responded favorably, hoping that a more centrist government may emerge. The USD has weakened in response. Fundamentally, we remain USD bearish, yet prevailing uncertainties including the new surge in Covid-19 cases could swing sentiment either way in the short-term.
Economy and Interest Rates
Global economic activity recovered strongly in the third quarter but momentum is now fading as the recovery is moving from the re-opening rebound to a second more cyclical phase, which is still marked by significant corporate balance sheet and labor market distortions, while a new round of Corona infections is undermining mobility and activity, especially in Europe.
FX Markets
Currency markets were largely range-bound in October and running into the US election. The main exception was the TRY, which fell nearly 10%. Among major currencies, the SEK was one of the best performers, while the CNY stood out among emerging market currencies.
FX Analytics
Going into more detail: Based on our proprietary analytical framework to take scalable exchange rate positions we are taking a close look on individual currency pairs.
The USD declined further in May as vaccination and recovery momentum increased in other economies...» more
The USD fell back in April as the rise in US interest rates faded. No strong trend has yet emerged a...» more
The USD strengthened in March on the back of improved economic sentiment and rising bond yields. The...» more
