8 Jan 2016
Long USD/Asia for 2016 - Nomura
FXStreet (Guatemala) - Analysts at Nomura offered justifications for their long USD/Asia strategy for 2016.
Key Quotes:
"The main themes highlighted in our Asia 2016 FX Outlook including China downside growth risks and RMB depreciation, local monetary policy easing biases, global monetary policy divergence and political/policy risks, remain intact and support our view of being broadly long USD/Asia in 2016
However, RMB developments since publication of our Anchor report have been significant and we believe that USD/CNY could move towards fair value (currently judged to be at 6.90) in the next three to six months.
As such, in addition to revising our spot USD/CNY forecast up to 6.90 by Q2 2016, we are making adjustments to price in more depreciation for currencies (in the next two quarters) that are sensitive to China developments, including KRW, TWD, SGD and MYR."
Key Quotes:
"The main themes highlighted in our Asia 2016 FX Outlook including China downside growth risks and RMB depreciation, local monetary policy easing biases, global monetary policy divergence and political/policy risks, remain intact and support our view of being broadly long USD/Asia in 2016
However, RMB developments since publication of our Anchor report have been significant and we believe that USD/CNY could move towards fair value (currently judged to be at 6.90) in the next three to six months.
As such, in addition to revising our spot USD/CNY forecast up to 6.90 by Q2 2016, we are making adjustments to price in more depreciation for currencies (in the next two quarters) that are sensitive to China developments, including KRW, TWD, SGD and MYR."