FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, notes that the top performing currencies this year have been the Swiss franc, US dollar and the yen.
“The Swiss franc surged higher early this year when the SNB unexpectedly removed their EUR/CHF floor and has since spent the rest of the year retracing those initial sharp gains as Swiss franc strength overshot significantly. We continue to agree with the SNB that the Swiss franc still appears significantly overvalued.”
“The US dollar was expected to strengthen this year but the scale of the rally has surprised. The Bloomberg consensus forecasts from the end of last year for EUR/USD, USD/CAD, AUD/USD, and USD/NOK were set at 1.1800, 1.1600, 0.8000, and 7.2400 respectively for the end of this year. It is only against the Swiss franc and yen that the US dollar is modestly weaker than expected.”
“The BoJ’s decision to refrain from further monetary easing, the sharp improvement in Japan’s current account surplus, and already significant undervaluation have all likely proved important in limiting further yen weakness. The trade-weighted yen has consolidated at lower levels this year encouraging speculation that the low point for the cycle may already be in place. It is a view we share expecting the yen to strengthen modestly in the year.”
Lee Hardman, Currency Analyst at MUFG, notes that the top performing currencies this year have been the Swiss franc, US dollar and the yen.
(Market News Provided by FXstreet)