It has the potential to escalate the debt crisis, simply because Italy's election shows that at least the majority of voters are very sceptical about all the measures taken by the Monti government, and the voters also favour Euro sceptical parties. Therefore, it stands to reason that it does in fact have the potential to worsen the crisis as it
That is very possible and that seems to be where probably the majority of the finance community comes down on it. I would say that my stance on this is a little bit different than where the majority is. In general, I am a supporter of what the Fed has done. I believe that in times of deep recession as
I think it is accurate to say that none of the countries, which really suffered from a financial collapse, have seen their debt reduced even by austerity. In fact, the debts normally just get worse, because unemployment reduces government revenues and we see this everywhere. Paul Krugman, who is a Nobel Prize winning economist, and also a columnist for the
Definitely, Eurozone economic data has disappointed and, thus, the downside risks for this year forecasts have increased. That is not to say, that we do not expect to see a turnaround in the leading indicators for the Eurozone though, and mainly for the core countries in the Euro area in Q1 2013. We still bank on a reversal of the
I agree with the view that looks at hyperinflation as a low probability event. If the main risk of quantitative easing (QE) was inflation, we would have probably seen some already, given the enormous increase in money printing occurred during 2008-2011. Since inflation has not picked up, it means that money injection has had some positive impact on real activity.
Since Mark Carney joining the Bank of England at the end of June 2013, there is a lot of speculation that he will use quite a new radical regime. We do not think it is going to be a case just yet, we believe that he is still going to be sticking to "flexible inflation targeting". He was quite clear
Officially the central bank will keep the 1.20 peg for the time being, which could be in fact a 2-year time span. The Swiss National Bank will be very hesitant to remove it too quickly mostly due to psychological reasons. I mean, while everybody knows that the central bank is buying the Euro at 1.20 francs, it effectively stops speculating
We have seen that the Euro moved back higher quite a bit over the last two months or so. The common currency has come from around 1.27 at the beginning of November and has gone up by 7-8% to 1.36. However, now we see that the Euro is doing a bit of correction. I think the movement up is justified
What happened on 22 January, was a significant shift in the monetary policy thinking at the Bank of Japan, and essentially, now it sees eye-to-eye with the current government. The Bank of Japan, being out of line with the government, was a substantial impediment to further Yen weakness, and we would have to wait for the Governor Shirakawa's term ending
Our forecast for EUR/USD is 1.36 and for GBP/USD – 1.60.
In my view, the Indian Rupee seems to be the most attractive at the moment, as it is offering the highest value in total return terms. I think the Rupee enjoys the following two aspects: pretty relevant carry and a potential appreciation against the U.S. Dollar, as the reform momentum, which started last September, is driven by the government decision
I do not have a big reason to disagree with it, as the Eurozone economy is still weak, the U.S is expected to grow 2% this year. The one I disagree with is the IMF the outlook for China. We forecast that China's growth will be 7,5% this year and 7% next year. It is very hard to see how
We have a positive view on gold, at least through the first half of 2013. This optimistic outlook is supported by what we perceive to be solid fundamentals, including a higher money supply growth from central banks like the BOJ or the Federal Reserve. In our opinion, the U.S. Dollar is going to weaken against other currencies on the Fed's
Yes, I do. I think that were definitely inflows last summer, particularly, when the European debt crisis spread to Spain, while still having a toll on Greek economy. However, as concerns the current situation, I believe we are seeing a reversal of some of those flows, which is also in line with EUR/CHF move higher.
Clearly an appreciating exchange rate is another headwind for Europe, which certainly the periphery of Europe would rather not have. However, I think it is not necessarily the most notable factor. To my mind, it is the case that we will see some further short-term support for the Euro, and we may as well find that the Euro potentially gets
At the moment, demand is in fact weak, but it is still rising. Thus, in 2013 we see tepid growth in global oil demand. There are two factors here: on the one hand, we are seeing declining demand from Europe (almost by 0.5mn b/d yoy in 2012), which is more due to the effect of fiscal austerity, and on the
I guess there is a bit more uncertainty surrounding the Australian economic outlook now. The money investment boom has probably peaked and we are a little bit unsure about how much support the RBA rate cuts have provided to the other parts of domestic economy. The question is still whether or not the RBA has done enough to stimulate domestic
In general, Danish growth has been absent for several years now, and the recovery out of the 2008 financial crisis has been very sluggish. That said, Denmark still enjoys, just like the rest of Scandinavia's countries, very healthy balances, marginal budget deficit, low debt levels and a positive current account - that all has mattered more for the currency market
Obviously, we have seen a slight change over the last couple of days. We have seen the Yen trading a little bit stronger against the Dollar and the Euro. I think that has got nothing to do with the BOJ yet, because that is more to do with some profit taking. The market is extremely short on Yen. We had
Dr. James Nixon, Chief European Economist at Societe Generale, shares his opinion on whether the European debt crisis is over and when we will see an improvement in the Eurozone labour market
It has been trading between roughly between 0.98 and 1.01 for the better part for more than 2 months now. There is no particular strong up or down trend in USD/CAD for the time being. However, I do think that there are risks that USD/CAD breaks down towards 0.97 in the coming weeks on the ground that the U.S. fiscal
The Sterling has become a difficult currency to predict largely because its fundamentals are a little awry. We had a series of very negative forecasts for the U.K. economic events during the autumn. However, things seem to change a little bit, and we have seen some positive data being released. I think the market has always been less incline to
I do not think it will last long. Perhaps, we have already seen the best part of it, especially on the FX side, where we saw a risk-on mood, with aussie and kiwi dollars gaining very much. This was something that I do not think will continue for a long time, because where the volatility is very low. Especially the
Professor Hendrik van den Berg discusses the chances of SDRs to become a new world's reserve currency as well as analyzes advantages and disadvantages of floating and fixed exchange rates