ING economists maintain a positive attitude towards commodity currencies.
MXN and BRL could hold up despite ongoing rate cut cycles
In the G10, we continue to see good upside potential for commodity currencies, particularly the undervalued Norwegian Krone, Australian Dollar and New Zealand Dollar.
In emerging markets, the Chinese Yuan should continue to be buoyed by China-specific factors until US rates decline decisively and allow USD/CNY to decline sustainably. The next two sessions are a key risk event for the Yuan and China-sensitive currencies.
In Latam, the Mexican Peso and the Brazilian Real could prove resilient despite ongoing rate cut cycles; while in the Central and Eastern Europe region, we expect the trajectories of the Polish Zloty (strong) and the Hungarian Forint (weak) to continue to diverge.
The main risks to our bearish view of the Dollar are a possible re-election of Donald Trump, positive for the Dollar or negative for the economy, or – from a purely macroeconomic perspective – a prolonged resistance of US inflation and the consequent postponement of the easing of the Fed.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
