ANZ FX Strategy Research is out with 3 key takeaways on majors FX outlook going into Q4 of this year.
First, that the performance of the USD is set to become less uniform; and that a rebound from the poor political sentiment is more likely to play out against low-yielding currencies like the JPY.
Second, that relative monetary policy dynamics will drive small currency moves, but will not dictate all currency performance
Finally, that the broader growth and volatility backdrop still suggests cyclical currencies can perform. However, outperformance is now looking more compelling against the JPY than the USD," ANZ argues.
"In the near term we favour being long the USD against low yielding currencies like the JPY, but think that the broader environment will place a solid floor under cyclical currencies. As such, we favour buying JPY crosses on dips," ANZ advises.
Source: ANZ, eFXnews™Original Article
