HSBC is "banging the bell" with a warning for traders trading mostly Swiss francs and Japanese yen. Their fears stem from an ever-loosening policy that stems from the risks of a trade war and real economic slowdown around the world. The so-called. "tariffonomy" will be here for some time.
HSBC believes that the governments of Switzerland and Japan are the most vulnerable to currency risk and will be most susceptible to foreign exchange intervention in order to suppress their currencies. The threat of new tariffs, which could prompt the US to intervene, has also prompted central banks to prepare for intervention. If risk off sentiment continues, SNB and BOJ will have to intervene to stop local currencies from rising. And overall for the Eurozone, we still expect the ECB's decision not to interfere with a new QE program.
HSBC emphasize that in addition to the real risks of escalating trade warfare, the risk of a currency war that shakes the FX markets is quite real. The ECB knows that the implementation of QE is a mechanism for currency depreciation, and this will be a rather bold decision in a world in a trade war that is on the brink of a currency conflict.
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.