A snap-shot of the G10’s – Nomura

By FXStreet Analysts Nomura offered a snap shot of the G10 environment and their opinions.

Key Quotes:

“We do not believe that just because the Fed is in play that EM cannot perform. Rising Fed expectations off the back of better US data are not necessarily bad for risk markets. The challenge is to pick the right funding currency – we like to fund out of euros, rather than dollars to side-step any Fed hikes.

“Two telephone polls this week showed a shift towards “remain”, and GBP outperformed. We published “What is the Bremain trade currency pair?” where our analysis finds GBP/JPY to be the outperformer on a “Remain In” vote, where we estimate it could appreciate 4.3%, vs a 3.5% GBP appreciation on a trade-weighted basis.”

“In a “Brexit” vote, we similarly find JPY, USD and CAD to be the outperformers. We also updated our analysis of the global commodity price declines since the June 2014 peak and the impact this general trend has had on the terms of trade (ToT) and the performance of the currencies of individual countries.”

“We determine that COP, RUB, AUD, BRL and ZAR could outperform while CLP, CAD, NZD and NOK are all currencies that have tended to outperform changes …read more

Source:: FX Street