AUD and NZD will remain caught between a rock and a hard place - ANZ

Analysts at ANZ Research share their take on the fx themes that will hold prominence in the month of August, in wake of the Brexit vote and yuan devaluation.

Key Quotes:

“A weaker GBP remains the clearest trend in markets. Policy easing, political uncertainty, and a twin deficit will all keep the pressure on. For the EUR, ties to the UK, together with economic underperformance, will keep downward pressure on track, though the depreciation will be far more gentle than the GBP.“

“AUD and NZD will remain caught between a rock (increasingly expensive currencies) and a hard place (continued flows from offshore investors).”

“The range should be maintained. In Asia, the RMB will continue to weaken modestly, while the rest of Asia begins to weaken after excessive flow had pushed currencies away from fundamentals.”