New rules for the greenback
Since the crisis, the market has had to come to terms with new rules for currencies. For instance, a weak US economy is not necessarily USD negative. For some time we have suggested that the FX market has lost its anchor of reason, and this is still the case.
AUD – not such a wonder Down Under
The market is ignoring the negative news for the AUD. The downgrading of Australian banks, the setback in commodity prices, worries over the US economy, and Eurozone sovereign risk should have all seen the AUD weaken. Ultimately the AUD will correct lower.
Risk on – risk off: sense and sensitivities
Recent big moves in commodities did not lead to a fallout for the commodity currencies. Some argue that correlations are breaking down. We disagree: ‘risk on – risk off’ continues to drive markets.
HSBC Global Research