macro and currency q1 2021

Millennium Global is pleased to share its latest Macro and Currency Quarterly Outlook Q1 2021 document:

  • We look for a soft patch in growth in Q1 both in the US and European economies but continued monetary and fiscal support. The prospect of widespread vaccination by H2 2021 should help investors look through and keep the USD on a weak footing, in view of its expensive valuation vs. developed markets, a widening current account deficit and low real yields.
  • Central banks’ focus on labour market slack points to Norges Bank and Bank of Canada leading the way in the long journey to policy normalisation, respectively on interest rates and balance sheet policy, which should benefit NOK and CAD.
  • EM currencies have yet to discount global economic recovery and show deep undervaluation, including BRL, TRY, PLN, INR based on our metrics (Fundamental Equilibrium Exchange Rate and PPP). While CNY is likely to continue to provide an anchor to Asia, deflation in China and rising private sector leverage call for capping CNY gains.

Keyword: Currency outlook Q1 2021, currency management

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