外汇展望：起起落落

Ramp on - Ramp off FX has been caught betweengeopolitical risks rising and falling,withthe ramping up of tensionsfavouring theUsD and vice versa.Hopes are still high that a sustainable'off ramp'can be found for MiddleEast tensions and disruptions, whichwouldseeUsDweaknessresume In this edition,we dive deeper intoGBP,CHF,Gold,and provide updatesonourG10FXmodels.Wealsoassessthe performance of G10 trading stylesandmore Summary We highlight our trade themes across major regions such as G10,Asia, CEEMEA and LatAm. We highlight ourkey points, convictions,and associated risks underpinning our currency forecasts across major regions such as G10, Asia, CEEMEA and LatAm. Overview: Ramp on - Ramp off tensions favouring the UsD and vice versa. Hopes are still high that a sustainable 'off ramp'canbe found forMiddle East tensions and disruptions,which would see UsD weakness resume. GBP:Walktheline (pg 20) Geopolitics dictate GBP-USD directionally,but relative inflation and rate expectations drivebroader performance. If Brent moves towards USD150/bl, it could test the UK's structuralvulnerabilities and weigh on GBP materially.Recent history shows policymakers walk a fine linebetween maintaining policy credibility and losing market confidence. CHF: Trapped (pg 25) Increased willingness to intervene should cap excessive CHF strength in the event of anothermarked drawdown in equities.Although fresh upside risks to inflation reduce the likelihood ofcontinue supportingCHFresilience. Gold: Bull-dozer (pg 28) Gold has retreated on liquidation following the Middle East conflict, escalating oil prices, a firmerUSD, and higher yields. Gold stands to resume its rally if the conflict subsides but much willdepend ontheoutlookforoil andthe UsD,and central bankdemand.Weraiseourforecastsacross the board in anticipation of a resumption of the rally as fiscal profligacy and other risksaid prices. G1oFXmodel update:Howtode-escalate? G10 FX may be at a critical juncture, with the USD now screening slightly"rich" against six(mostly)risk-sensitivecurrencies.Inpotentialtruceormodestde-escalationscenarios,ourmodels suggest that the AUD, NZD, and CAD have room to recover. In contrast, the EUR looksrelatively"rich" vs the USD. Amongthefive rules,onlycarry'and‘valuation'beatthebuyUsDbenchmark'forthequarteras a whole, but not the month of March."Monetary policy trajectory'was the worst performingrule in March. OtherG1Ocurrenciesdeclinedasrisk-offsentiment dominated markets.The Fed,ECB, BoJ,BoE, Riksbank and SNB held policy rates, while the RBA raised its cash rate by 25bp. this report.Vanchit Gupta is employed by a non-US affiliate of HSBC Securities (USA) Inc.and is not registered/qualified pursuanttoFINRA regulations. FX: Key trade themes →Asia:Lower CHF-CNH,LowerTHB-KRW,HigherUSD-IDR→CEEMEA:LoWerEUR-PLNLatAm:LowerUSD-PENandLowerUSD-CLP G10 For details of trade ideas, please see the latest EM FX Roadmap (30 March), FX Tactician(19 March), and G10 FX model update (7 April), G10 themes remain dominated by the USD, which could remain strong if supply disruption inthe Middle East persists. The degree of its strength is also dependent on other factors, namelythe Fed outlook and global growth momentum. In a stagflationary scenario of a hawkish Fedthatimplicitlyhasaslighteasingbiascould limititsrise.WithmostG1oeconomiesbeingnetimporters of energy, it may be worth looking towards neutralising some of the impact of volatileoilpricesbylookingatnon-UsDpairs (seebelow), Higher AUD-CHFWe believe the CHF is trapped (see p25). On the one hand, the currency is unable to strengthen aggressively, as intervention risk poses a limiting factor. The SNB has made it clearto the FX market that any sizeable move higher in the CHF will be countered by greaterwillingness to intervene. On the other hand, the CHF could remain strong as fundamentalsscreen positively -for example, the currency possesses a strong twin surplus, which is a rarityin G10 FX. Upside risks to inflation also reduce the need for aggressive intervention. Whilethese forces are likely to offset each other, we believe this stability in the CHF should make it anattractivefundingcurrencygiven itslowpolicyrate.Weprefera higherAUD-CHF as theAUDstands out in G10 FX, despite softening in the recent heightened risk aversion. The currencyappears attractive given the RBA's hawkish pre-conflict stance. With most economies in theG10 facing a similar supply shock, the starting point for Australian inflation was already toouncomfortable for the RBA Lower GBP-CAD GBP has shown resilience since the start of the conflict in the Middle East. We believe this isNonetheless, with the topic of potential de-escalation arriving in FX markets, this rate buffer thatGBP has built up may be eroded. Even in a re-escalation scenario, the currency may be on thebackfoot against some other G10 currencies. GBP may again build up a rates buffer, but the FXmarket's focus may linger towards more structural facto