Robert Rennie, Research Analyst at Westpac, suggests that they remain torn between positive US$ fundamentals on the one hand and the potential for all out trade war/ European political risks and EM volatility on the other with respect to the USD/JPY pair.
Key Quotes
“The fact that, even in the midst of what has felt like a significant leg up in trade hostilities between the EU, US and China, USD/JPY could not even dip below 109 does suggest that the next move should be higher.”
“However, a range of ¥ crosses are perched on some fairly significant lows e.g. AUD/JPY.”
“Thus we would rather seek safety in a neutral near term outlook but assume that the current trade storm will pass eventually, and hold onto a positive medium term outlook.”
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