Date
23 September 2017
Morgan Stanley's Geoff Kendrick says the yen and the euro could fall further this year. Photo: HKEJ
Morgan Stanley's Geoff Kendrick says the yen and the euro could fall further this year. Photo: HKEJ

Investors must brace for further forex market volatility

Volatility is likely to remain a feature on the foreign exchange markets this year, albeit to a lesser degree compared to 2014, according to currency strategists and traders.

The greenback and the renminbi could maintain a relatively strong trend compared with the euro and the yen, amid better economic outlooks for the US and China, the Hong Kong Economic Journal reported.

Geoff Kendrick, strategist for Asian currencies at Morgan Stanley, expects the yen to touch 127 to a US dollar, while the euro is seen falling to US$1.12.

As a rival to Japan on exports, South Korea might be hit by a weaker yen though a currency war in Asia is unlikely, Kendrick added. 

The plunge in the Russian ruble may have prompted Asian and other emerging countries to step up defensive measures for their currencies, minimizing chances of a currency crisis in the region, he said.

Meanwhile, the renminbi may trend up to 6.09 to the US dollar as Beijing is aware of the problems that prolonged capital outflows might bring to the Chinese economy.

Woody Chan, head of financial markets at Standard Chartered Bank Hong Kong, even sees the possibility of the redback hitting 5.98 in the fourth quarter as a slump in oil prices might undermine the strength of the greenback.

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VW/JP/RC

Freelance journalist

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