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Hardy: My FX outlook for 2014
Expect plenty of nervousness in the forex markets in the first quarter of 2014, that's according to Saxo Bank's Head of FX Strategy, John Hardy. With the Fed on course to start "tapering" its bond buying programme in the new year, the markets could be distorted by what John calls the odd weak data point.
Predicting euro dollar is tricky, says John. On a technical sense he says we need to see some breaks happening, below USD 1.35. That would underline we've seen the top. He says he's a believer in "selling weakness, not countering strength".
If tapering continues and the Bank of Japan continues its aggressive tone, John says Dollar Yen could continue to appreciate and most of that's going to happen in the early part of the year. After that, we should see a slowdown in the USDJPY rally.
Emerging market currencies look vulnerable in 2014. He says that as long as US yields continue to rise, there's a risk that some countries' currencies, especially those with structural deficits, could be under pressure. However, he says we could see some "valuable and interesting levels" to enable the taking of longer positions.
02:12 minutes
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