Forex Weekly

Each week, we publish our Forex insights. Check regularly this space for up-to-date information. You can also contact us and enroll to receive our publication each week directly in your inbox by writing to


Ugo Biancaniello Foreign Exchange Advisor
José-Manuel Luna Foreign Exchange Advisor
Pier-Luigi Bonelli Foreign Exchange Advisor

The global economy appears remarkably resilient so far to negative (geo)political headlines, given the crisis in Catalonia, Brexit and Japanese elections.

In its latest round of forecasts, the IMF points to a broadening and strengthening of growth prospects. Nevertheless, the institution calls for structural reforms to increase potential growth, as the output gap is gradually shrinking.

Several themes were apparent in the minutes to the September FOMC meetings. First, both staff and the FOMC see the recent large storms as having only transitory effects on activity with no medium-term implications. Second, the committee seems poised to raise rates a third time this year in December so long as the economy performs as expected. Third, concerns about how to balance recent (dis)inflation signals against buoyant financial market conditions inject uncertainty into the reaction function next year, particularly if there is a change at the helm of the committee.

The BoE credit conditions survey points to much tighter supply for household credit over the coming quarter, particularly for unsecured debt.

In Japan, The BoJ’s "Sakura" report on regional economies also highlighted improvements in consumption. In the report, four of nine regions revised their overall assessments upward, noting improvements especially in the areas of public investment and production.

The MAS kept policy unchanged, but opened room for a policy change. Some analysts expect the MAS to adopt an appreciating SGD NEER band in April 2018.

The latest CPI report in Brazil surprised on the upside, at 0.16% m/m during September. Market prices printed at 0.13% m/m and were the main driver, as the drop in food prices was smaller than expected. On the other hand, regulated prices stabilized and printed 0.24% m/m, amid a decline in electrical tariffs and deceleration on gasoline prices.