22 Oct 2015
Weak CNY to weigh negatively on the AUD and NZD - SocGen
FXStreet (Delhi) – Research Team at Societe Generale, suggest that a weaker CNY and the structural China slowdown would weigh negatively on the AUD and NZD, both of which are likely to hit new lows against the dollar next year.
Key Quotes
“The NZD will likely perform the worse of the two as the RBNZ uses its greater scope to ease policy and its downward valuation means reversion proceeds further. But the declines in the Antipodean currencies could be sharper if the expected CNY depreciation becomes more disorderly and is accompanied by renewed weakness in global commodity prices and in EMFX more broadly.”
“Meanwhile, a more gradual Fed hiking cycle, and the possibility that the commodity price downtrends are in the final stages, should result in a lower peak in USD/CAD. CAD is likely to outperform against both the NZD and AUD, and indeed, against the CNY too.”
Key Quotes
“The NZD will likely perform the worse of the two as the RBNZ uses its greater scope to ease policy and its downward valuation means reversion proceeds further. But the declines in the Antipodean currencies could be sharper if the expected CNY depreciation becomes more disorderly and is accompanied by renewed weakness in global commodity prices and in EMFX more broadly.”
“Meanwhile, a more gradual Fed hiking cycle, and the possibility that the commodity price downtrends are in the final stages, should result in a lower peak in USD/CAD. CAD is likely to outperform against both the NZD and AUD, and indeed, against the CNY too.”