Free Profitable Forex Newsletter
Hey! This is Philip with a new update on the Forex market amid the latest developments and ahead of the busy next week.
Citi has a bullish view on safe-haven currencies and assets amid a fragile geopolitical and economic environment. The comments as delivered via the eFXplus service are shown below:
JPY, CHF & Gold: Safe Haven Demand To Stay - Citi
First appeared on eFXplus on Jul 24 - 11:15 AM
"Despite renewed optimism about US – China trade talks and some de-escalation of Mideast tensions, our CitiFX Flows team sees better buyers of CHF on the risk of some cracks emerging from the US earnings season that could serve as a catalyst for safe haven demand. Taking also into account that the extreme long positioning has substantially pared back, CHF could
find some room to continue its bullish run with the current uncertainty over Brexit following the elevation of Boris Johnson as UK PM also adding to CHF’s outperformance versus GBP," Citi notes.
"Our CitiFX Flows team also reports inflows into JPY from real money and hedge funds ahead of US – Japan trade talks and Citi Commodities analysts think late 2Q may have represented a structural regime shift for Gold as the ECB, FOMC and other central banks look to ease policy with the team also noting the record pace of official sector bullion buying," Citi adds.
On the other hand, Mitsubishi UFJ Financial Group expects more of the same rangy and low-volatility behavior for USDJPY and not much impact from next week's Fed and BOJ meetings. Read their views as provided via the eFXplus service:
USD/JPY: Neutral In 3-Big Figures Range Into Next Week's BoJ & FOMC Meetings - MUFG
First appeared on eFXplus on Jul 25 - 03:45 PM
MUFG Research discusses USD/JPY tactical outlook and adopts a neutral bias, expecting the pair to trade in 106.50-109.50 range in the near-term.
"We expect that the BoJ will likely stay the course on monetary policy with no surprises. Japanese investors have been buying foreign bonds with JPY forward hedges. Negative yields will probably keep supporting their foreign bond buying,"MUFG projects.
"We expect the FOMC to cut policy rates by 25bps, but this has already been priced in and is unlikely to have much impact. Fed Chair Powell may strike a neutral stance in his comments after the meeting, but this depends on any political pressure.
US Treasury yields would support a stronger USD, and the 109.00-level could come into view. But expectations of more easing are diminishing in the US stock market, and USD/JPY will likely be top-heavy. High-level talks between the US and China will be important, but are not likely to impact USD/JPY much," MUFG adds.
These insights are from the eFXplus service which provides daily price-based FX data 24/5 derived from banks and
institutions and Thomson Reuters IFR Markets.
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