Although it did not feel like it at times, the British pound and the Canadian dollar came out of the second quarter of 2018 with a reasonably positive result. It was the US dollar, though, that minced the opposition.
Gains of 7.1% against sterling – ten cents – and 6.4% from the euro were only the half of it. The Greenback took 3.6% from the Canadian dollar, 4.6% out of the Australian dollar and went up by 6.4% against the Kiwi.
One can only wonder how well the US dollar might have done had it not been for the American president’s trade war. Not only are investors unconvinced about its longer-term benefits to the US economy, they have not the faintest clue what mischief might arise in the short term.
Another – now almost traditional – uncertainty also lingers. One day they will make a movie out of Brexit, but not until the end of the story is known. And that remains elusively beyond the horizon.
Read the full Quarterly FX Forecast here