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11 Dec 2014
USD to become strongest currency in 2015 - HSBC
FXStreet (Guatemala) - Daragh Maher, FX Strategist & David Bloom, Global Head of FX Strategy explained in a currency report special that the FX market is under-estimating the risk of destabilising currency moves during 2015.
Key Quotes:
“We have previously examined how a strong USD might help save the world from deflation”.
“We conclude that if USD strength were to become extreme, the results could become malign rather than benevolent”.
“The three main sources of potential currency market blow-outs are:
The currency war intensifies dangerously as Japan loses control of the JPY; Reignited European break-up fears; Excessive USD strength provokes an EM FX crisis.
“The above scenarios point to a much stronger USD that US policymakers could be powerless to prevent. This, in turn, creates a third line of potential trauma for the FX market - an emerging market currency crisis”.
“Extreme dollar strength is a risk case we have now factored into our forecasts”.
“It means we retain our view that the USD will be the strongest currency in the world during 2015, just now by an even wider margin”.
Key Quotes:
“We have previously examined how a strong USD might help save the world from deflation”.
“We conclude that if USD strength were to become extreme, the results could become malign rather than benevolent”.
“The three main sources of potential currency market blow-outs are:
The currency war intensifies dangerously as Japan loses control of the JPY; Reignited European break-up fears; Excessive USD strength provokes an EM FX crisis.
“The above scenarios point to a much stronger USD that US policymakers could be powerless to prevent. This, in turn, creates a third line of potential trauma for the FX market - an emerging market currency crisis”.
“Extreme dollar strength is a risk case we have now factored into our forecasts”.
“It means we retain our view that the USD will be the strongest currency in the world during 2015, just now by an even wider margin”.