The U.S. dollar index remains
near a 12-year high as Friday's payroll data showed that the
job market is in good enough shape for the Fed hike interest
rates as early as September.
J.P. Morgan foreign exchange strategist John
Norman believes the short-term view on commodity currencies
should remain negative. That's because of the manufacturing
slump in China, the likelihood of higher interest rates in the
U.S., and the lack of extreme cheapness in both commodities and
commodity currencies, despite significant declines since 2013.
Brent crude is down about 55 per cent , the Russian ruble has dipped roughly 50 per cent, the Brazilian real fallen approximately 40 per cent, and the New
Zealand dollar has shed about 25 per cent.
That has people wondering if these assets are cheap enough
to buy, or at least low enough to stop shorting and
underweighting. Norman continues to think it's too early for
that.
He noted long the U.S. dollar, and short selected commodity currencies
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