Economic Update
Currency Outlook (Dec 09) |
| What could stop the risk rally? Investors are continually scanning the horizon for developments that might cause the rally in risk assets to reverse. The biggest risk, in our view, is the market starts to worry about a double-dip, where the bounce in activity gives way to renewed weakness in 2010. Growing fears of a double-dip would be negative for risk assets and initially dollar positive. Until the US data starts to turn down decisively, the markets may wobble but a true double dipper will not take place. Cable – an early Christmas homecoming We update the analysis that we have produced for the past nine years, which shows how GBP-USD tends to rise in December. Those that believe this could happen again should trade sooner rather than later. RMB still in a holding pattern While the economic case for RMB appreciation may seem to be selfevident, we find little onshore support for currency appreciation to resume anytime soon. To download the full report on Currency Outlook, please click here A copy of November 2009 HSBC Market Forecasts can be found here. |
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