Winners and losers amongst FX space in 2016 – SocGen

By FXStreet FXStreet (Delhi) – Research Team at Societe Genrale, suggests that the dollar is expected to remain on an upward trajectory in 2016 but the gains against EM currencies will be modest (3.3%) compared to that experienced in 2014 and 2015 (13%).

Key Quotes

“High yielders with current account deficits such as the BRL, IDR, TRY, and ZAR will remain at the mercy of poor risk appetite and weak capital inflow dynamics.”

“The RMB is expected to embark on a path of gradual and controlled depreciation that will drag down the entire regional currency complex, but more so those with high export exposure and similar trade structures (KRW and TWD). The MXN and CLP will show modest losses by comparison as Banixo embarks on an aggressive campaign to raise interest rates by 200bp and BCCh hikes by 75bp in the first half of the year.”

“It is not all doom and gloom. The RUB is expected to do well next year as domestic factors coupled with modestly higher oil prices will prove beneficial. The PLN, HUF, CZK, and RON are expected to outperform the EUR on the back of prominent ECB QE spill-over effects given the closer financial ties to the euro area, robust …read more

Source:: FX Street