John Horner, a currency strategist at Deutsche Bank AG in Sydney, commented on currency markets in an interview from Sydney on Bloomberg Television.
On the U.S. dollar:
“Risk sentiment has improved towards the tail end of last week into this week. That is weighing on the dollar particularly against those typical beneficiaries” such as the Australian and New Zealand dollars.
On the yen and the dollar-yen rate:
“We continue to like the Japanese yen, even with all the talk of intervention and the heightened scrutiny it’s getting from Japanese policy makers. We continue to see the gravitational pull of Japan’s current-account surpluses, leading it towards further strength.”
“We’ve had a 75 target for some time and still think that level is likely tested before the down move is complete.”
On Australian dollar:
“We’re seeing some calming of extreme volatility we saw in the earlier part of last week and that’s seen the typical beneficiaries of such better risk sentiment, the Australian dollar and New Zealand dollar, doing somewhat better.”
“If the data is as soft as things like the consumer sentiment numbers in the U.S. on Friday indicate, then a test to the downside very much comes into the cards. A retest of this year’s lows below 98 cents would seem very likely.”
On the New Zealand dollar:
“We don’t think expectations of an RBNZ hike are going to come back any time soon, and that’s probably going to stop the New Zealand dollar rallying too hard from here, or certainly outperforming from here.”