Asian currencies to outperform EUR and GBP in the near term – ANZ

Analysts at ANZ suggest that while US-China trade relationship remains a wild card, on a relative basis, they expect most Asian currencies to outperform EUR and GBP in the near term.

Key Quotes

“On EUR, we expect the broad downtrend in EUR/USD to continue amid elevated geopolitical, trade and economic uncertainties. The risk of a more negative deposit rate from the ECB and a resumption of quantitative easing is growing. We expect some Asian currencies (particularly KRW and SGD) to outperform EUR in the near term.”

“For GBP, Brexit uncertainty has intensified. With the next Prime Minister likely to adopt a more hard-line approach, the risk of a hard Brexit (or a no-deal Brexit) has increased. GBP/USD could trade in the 1.20-1.25 range in Q3. We continue to recommend selling rallies in GBP/Asia crosses. GBP/CNH and GBP/SGD could head lower, potentially breaking key support levels.”