Improving prospects for a US-Iran peace deal have led to a rotation in FX markets as oil prices decline. UBS recommends focusing on pro-growth and carry currencies while reducing exposure to safe-havens like the CHF.
Key Takeaways
- 1.Improved prospects for a US-Iran peace deal have lowered oil prices, triggering an FX market rotation away from oil exporters (USD, NOK) toward pro-cyclical currencies (SEK, EUR).
- 2.UBS favors pro-growth and carry currencies, specifically SEK, NZD, AUD, CNY, and the newly added GBP, while remaining cautious on CHF.
Table of Contents
- FX Monthly VIEW
- Risks to our view
- Appendix
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Authors
Dominic SchniderTilmann KolbConstantin BolzTeck Leng TanClémence DumoncelWayne Gordon
Securities
SEKGBP
Themes
FX Carry TradeGeopolitical De-escalation
Regions
Middle EastUnited StatesIranSweden