Forex Forecast

USD benefiting from ‘reverse’ diversification The Bank of Japan’s QQE program is already 8 months old,

Can the BoC use the CAD as a direct policy tool? The Bank of Canada is expected on Wednesday to join the growing list of minor G10 central banks in anchoring expansionary policy guidance.

Tapering losing influence over some trades For the bulk of the last three quarters, markets have designated US policy and

Three forces taking turns The Australian dollar weakened during the course of 2013 under the weight of three key forces:

Governments are looking at generating inflation too Combating deflation is a global priority, but developments in national labour markets have been at the forefront of such structural headwinds for prices.

Cross-asset confidence supporting risk The FOMC’s December taper should have been the event which would signal the end of secular declines in FX volatility.

Worse to come before it gets better The Canadian dollar continued its slide overnight, with USDCAD rising to highs not seen since Oct. 2009.

Expecting higher dollar versus the yen, Nordic and commodity currencies Fed officials are likely to ‘look through’ Friday’s soft payrolls report.

More BoJ easing still likely The heavy price action in USDJPY after Friday’s payrolls report does not change our fundamental view that the USDJPY upswing is likely to extend this year.

Dollar’s risk status still unclear Our economists have chosen not to take the ADP figure as signal for stronger payrolls,