G10: Markets Experiencing A Temporary Reprieve From Reality; What’s Next? – Barclays

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Markets are moving between hope and despair and the everchanging mood may be confusing. What’s next?

Here is their view, courtesy of eFXdata:

Barclays Research discusses the recent conditions of the FX markets and what could be on the cards going into next year.

“FX markets are experiencing a temporary reprieve from reality, in our view, believing that the Fed may be near the end of its hiking cycle and that other economies could rise amid the deceleration of the US economy that would imply.

While this market narrative lasts, we see the possibility that higher carry likely could help EM currencies grind higher temporarily and some G10 currencies may join in. But, by early in the New Year, we expect the reality of sustained US divergence to bite, reinforcing the USD’s high level range trade versus G10 currencies and sustained appreciation versus EM FX.

Against this backdrop the EUR faces downside risks, the JPY likely will benefit and sterling’s outlook is increasingly bimodal,” Barclays argues.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.