SINGAPORE — Leading foreign exchange (FX) executives are betting on a stronger US dollar in 2014 and are mixed about emerging markets, according to a poll of regional and global FX experts at the Bloomberg FX13 Summit held in Singapore last week.
“The uncertainty around quantitative easing is creating intense market volatility, but is a signal that the real economy is recovering and that sustainable growth is now occurring,” said Tod Van Name, global head of Bloomberg’s FX business. “There is a strong view that money flows are returning to developed markets.”
The Poll, to gauge FX executives’ outlook on the direction of currencies, macroeconomic factors and regulations, revealed:
A majority of attendees (58%) expect the US Federal Reserve to begin tapering the monetary stimulus this year and not wait until 2014.
The US dollar is expected to strengthen with 7 out of 10 attendees indicating they would invest in it next year.
Almost half of respondents expect the Monetary Authority of Singapore (MAS) to leave the Singapore Dollar unchanged while a further 30% expect the MAS to move to strengthen the dollar further.
The Indian rupee (INR) is expected to depreciate the most in 2014, according to more than one-third of attendees. When asked when the Indonesian rupiah (IDR) will bottom out, those polled were almost evenly split between this year and next.
Only 12% expect that the Australian dollar (AUD) would drop in 2014. Another 31% said the Indonesian rupiah (IDR) would depreciate most and only 22% said that the Japanese yen (JPY) would lose further value next year.
On the subject of global regulation of the over-the-counter (OTC) derivatives market, more than 80% of those polled said that their organizations are either only somewhat prepared or not prepared enough for pending regulations, indicating the need for a significant ramp up in preparedness across the finance sector.
“These responses complement the findings of our survey on regulation conducted earlier this year, affirming the need for our clients to meet higher standards for transparency in the FX and OTC markets. Our approval as a Swap Execution Facility provides all the tools they need to comply with new FX derivative mandates,” Van Name said.
The poll was conducted in conjunction with a panel discussion, “Quantitative Easing and Currency Volatility – What’s Next for ASEAN?” and included:
Simon Grose-Hodge, Director, LGT Bank in Lichenstein
Callum Henderson, Managing Director, Global Head of FX Research, Standard Chartered Bank
Tamara Henderson, Bloomberg Senior Economist
Jens Lauschke, Regional Strategist for Group Research, DBS Bank
Bernard Lock, Director and Regional Manager, Asia Pacific, FX Concepts LLC
The Bloomberg FX13 event drew more than 140 financial executives including foreign exchange traders, investors, investment advisers, portfolio managers and treasury managers to Bloomberg’s Singapore office on Thursday.
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For more information on Bloomberg FX visit http://www.bloomberg.com/professional/foreign_exchange/
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