Flattening Curves and FX

Greg Gibbs of Amplifying Global FX Capital is a veteran macro strategist, with a strong focus on FX markets. In this piece he examines the trend of flattening curves (not just in the US), what he thinks is driving it, and what it means for FX markets. Gibbs argues that flattening curves are a pivot to the way currency markets are set to trade.  Until recently, a weaker USD trend, falling yields and oil, plus rising equities have boosted demand for EM currencies. However, risks are mounting for equities and investors may soon switch to seek out more traditional safe havens, such as gold and the JPY. Investors should also begin to worry that the US Federal Reserve will stick to its plan to normalize policy. Therefore the  balance of risks is swinging towards out-performance in JPY vs EM and commodity currencies. This piece is available on SmartKarma