Press Room

FX forecasts and associated rankings are published on behalf of Monex Europe and Monex Canada.

Monex Europe’s broad expectations of a downturn in the US dollar in April yielded positive short-term forecasts over the 1-month and 3-month horizon. In April, a repricing of the US economic outperformance narrative in fixed income and FX markets resulted in the DXY index slumping some 2.1%, while the MSCI Emerging Market Currency Index rose 1.47%. Procyclical currencies and currencies with relatively hawkish central banks benefitted the most against the US dollar in April.

Our expectation of pockets of deeper dollar depreciation in some EM and G10 currencies proved correct and resulted in strong rankings in NOK, RUB and LATAM currencies.

Looking ahead, our May forecasts anticipate a continued decline in the US dollar, albeit at a slower pace than that seen in April. We’ve since adjusted our near-term EURUSD calls higher as vaccine progress suggests the bloc will begin to reopen on a broader scale towards the end of Q2, while we have adjusted our JPY forecast to reflect a deteriorating domestic Covid-19 situation.


Our near-term forecasts (1-month and 3-month) performed well in April, with notable performances in EURNOK and the Antipodean currencies. Our expectations of procyclical currencies benefitting from a repricing in the US dollar yielded such results, however, events in the eurozone resulted in our1-month EURUSD forecast of 1.18 being too conservative. We have since adjusted this to 1.21 to reflect the faster pace of vaccine distribution in the bloc.

Similar to March’s results, our structural calls on major currency pairs like EURUSD and USDJPY continue to perform well during the recovery phase of the economic cycle.



Risks were elevated within the EM space over the course of April, with sanctions imposed on Russia, a hiking cycle beginning in Brazil, and a substantial wave of Covid-19 infections arising in South East Asia. In light of the events, Monex analysts are proud to retain their strong near-term rankings in the EM space.

Looking ahead to May, Monex’s forecasts continue to envisage a recovery in the EM FX space, with notable exceptions in ZAR and TRY due to idiosyncratic factors.



Author: Simon Harvey, Senior FX Market Analyst



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