Currency Views and Valuations
This chart book presents commentary and analysis of historical currency momentum, valuation, and fundamentals in five key base currencies.
Currency
Outlook 2018: Stick Around for Dessert
In our 2018 outlook, we review the prospects for several asset classes—developed and emerging markets equities, credit, real assets, sovereign bonds, and currencies—and share the advice of our chief investment strategist.
Should Institutional Investors Hold Cryptocurrencies?
In our opinion, institutional investors are better served focusing on investing in companies seeking to profit from the development and adoption of blockchain technology and “fintech” (financial technology) more broadly than holding cryptocurrencies directly.
Cryptocurrencies: Boom or Bubble?
Institutional investors should very carefully consider the risks of cryptocurrencies before investing.
Is the US Dollar Dead?
We are not ready to pronounce the strong dollar cycle dead, but do admit the US dollar is in critical condition. Investors should remain partially unhedged or prepared to ride out a period of currency volatility.
Do the Results of the First Round of the French Presidential Election Sound the All Clear for European Risk Assets?
Although the election results provide a powerful “risk-on” catalyst in the short term, the underlying long-term problems facing France and the Eurozone are unlikely to go away under a Macron presidency, so the old adage “sell in May and go away” may be vindicated yet again.
What’s Next for the US Dollar?
We still expect a rising US dollar over the coming year or so; however, the currency is entering the final phase of the strong-dollar cycle and investors should be aware that valuations and historical cycles suggest USD weakness over the coming decade.
The Final Phase of USD Strength
History implies the US dollar has more to rise before this strong dollar cycle is over; however, much depends on the fiscal and trade policies enacted by politicians and the responses from global central banks. This chart book provides currency views and historical analysis of momentum, valuation, and fundamentals for five major currencies: USD, GBP, EUR, CHF, and JPY.
Are “Reflation Trades” Reversing or Just Pausing?
Some of the reflation trades that received a boost from the US election look to be merely taking a breather as investors square positions; however, the fundamental support for others—particularly the outperformance of US small-cap equities—is challenged.
Investment Publications Highlights: January 2017
January’s publication summarizes three articles on currencies. The first discusses why covered interest rate parity has not held since the global financial crisis, the second highlights expectations for major currency pairs this year, and the third argues that hedged equities may not be reducing risks in portfolios.