HSBC's global head of currency strategy, David Bloom, spoke to Bloomberg TV earlier
- Interest rates in the short-end is really high in the US
- And "you have 125 million of the richest taxpayers to back you up"
- That's "a thing of beauty"
- It's all about interest rate differentials
- US seems to be doing really well, and all others seem to be "failing"
- In spot FX, it's all about the front end of the curve
- It's all about rates today, not about rates in 10 years
- European economy is faltering quite badly
- Europe has gone from Macron euphoria to the situation in Italy now
- So, cyclically and politically Europe is looking worse
- Sees EUR/USD still falling towards 1.1500
Bloom is quite an interesting character and if you haven't checked out any of his interviews, you should try sitting through one. He's a very blunt guy and gets straight to the point of the discussion.
He also argues that the swissie is not offering the same kind of allure it used to in terms of safe haven status and that the yen is the ultimate safe haven currency right now.
Another thing he pointed out in the interview is that all the numbers and everything don't matter in trading currencies. It's all about expectations. That's something I can't agree more.
You can look at growth figures or data points any which way you like and argue that 100 is still greater than 1. But if the market is expecting 200 instead of a 100, sometimes 1 is greater when the expectation is 0.
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