A shift of dynamics occuring? - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 3, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Guatemala) - Analysts at TD securities noted the recent events in the FX space and puts the case forward for a potential shift in dynamics taking place.

    Key Quotes:

    "Even though equities and oil prices remain under pressure, we may be seeing early signs that intermarket relationships in play over the last few months may be starting to shift.

    This could have important implications for G10FX, particularly if the dominance of the energy-equities symbiosis is approaching its peak.

    The CAD may be among the first G10 currencies to show a reversion back to more conventional drivers as interest rate differentials have wielded a stronger influence lately.

    Expect the USD to struggle further if rate differentials take on more prominence in FX markets. The US yield advantage has eroded as the growth outlook there has deteriorated.

    We think EUR/USD is likely to trade on a firmer footing as the 1.13 area beckons. We see USD/JPY trading lower toward our 110 target. Both the ECB and BoJ may try to offset these moves, but with the emphasis now on a weaker USD, those efforts may lack their prior punch."
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