Scanning through analysis from forex traders and analysts is producing a more or less consistent theme:

Standard Bank not inclined to make new forecasts. Steve Barrow:

  • "A problem that we have found all this year is that the sharp and sudden sentiment shifts caused primarily by trade tensions are stopping many currencies from trending in a clear way and that has made position-taking more difficult
  • There are few signs of this abating and, perhaps not too surprisingly, our currency indicators tend to be both mixed and weak"

Will the trade conflict turn into a currency war?

  • Is US policy for a weaker USD or a stronger one?
  • Weaker might be better against Europe … but stronger better against China (would lift the cost of debt and could trigger capital flight)

Societe Generale, Kit Juckes

  • yen "the pick of the currencies within Asia"
  • "I really don't know why the yen isn't stronger
  • My default position is to believe that it will be, in due course"

Commerzbank stumped on the USD is headed

Michael Every - Rabobank

  • Says market perception is yuan weakness a "catch up" rather than a currency war
  • Makes the outlook difficult

(analyst comments via Bloomberg)


It is unusual to see an open admission of being perplexed by markets.

The random tweets on policy are damaging.

While it is tricky for currency traders, imagine if you are trying to run a real business (soybean farmers in the US might want to weigh in on this …) - trying to manage production, decide to invest big sums in new lines or products, keep people employed …..

What a mess.