Daily FNArena News - Currencies

Brazil has acted to stem the rise of its currency, as European finance ministers meet to discuss equivalent problems with the euro. A bounce in the US dollar would have a material effect on stock prices.

FX analysts from Danske Markets have some serious reservations about the recovery of the US dollar.

The RBA rate hike and better labour market figures have driven the Australian dollar higher this week and National Bank suggests there remains scope for further gains.

As world leaders meet tomorrow to discuss ways of rebalancing the global economy to prevent another GFC, thoughts turn to the Plaza Accord of 1985.

National Australia Bank has lifted its Aussie and New Zealand dollar forecasts against the greenback.

NAB suggests the Australian dollar is not overvalued, while Macquarie sees the Kiwi dollar posting further gains against the USD.

CBA believes market speculation the US dollar will become the world’s primary funding currency for the carry trade will prove incorrect.

Danske Bank suggests weak underlying fundamentals and a similar technical picture should see the US dollar fall further against the euro in coming months.

Danske Bank expects further US dollar weakness in coming months as it has typically underperformed in an expansionary cycle, while Westpac sees further depreciation in the AUD/NZD rate.

Despite a slight dip at the end of August, long positions in pro-cyclical currencies are back on the rise.