Goldman - Stay long on JPY into Jackson Hole

The yen provides an attractive risk-return ratio as the stock market key event approaches this week.

Goldman Sachs Co-Head of Global FX and EM Strategy, Zach Pandl commented that it is good to keep the long yen against the dollar, the euro and the Canadian this week, due to the central bankers gathering in Jackson Hole on 22-24/08/2019 .

"If the Fed signals a significant relief, there will be a decrease in interest differentiation and that will push USD / JPY down. Alternatively, any signal of steady growth in internal indicators and a warning of a deep fall in interest rates will lead to a sale of risky assets, will support the yen again. "

For the euro, Pandl says headwinds will intensify because of weak fundamental prerequisites that will obscure the positives in the short term. Adding the potential of PMI in the Eurozone and Fed spokesmen to disappoint market expectations - this can make the difference between the US and Europe even greater.

About the prospects for Jackson Hole, the company commented that the risk to the yen this week lies in "the development of the US-China trade conflict."

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