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15 Apr 2015
IMF World Economic Outlook and FX implications – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes IMF forecast changes warn of deterioration in the Americas and amelioration in Europe and Asia.
Key Quotes
“There are significant changes contained in the outlook, which we summarize as:
World growth: stable at 3.5% in 2015.
Downgrades to GDP expectations for U.S., Canada and Latam; however the U.S. has fastest growth pace among advanced economies;
Upgrades to GDP expectations for Asia and Euroarea;
Recession risk decreased in all areas except LATAM, where it has jumped to 33%;
Deflation risk in Europe has been revised down to 30%;”
“Together we think these shifts reflect what is being slowly priced into markets, that the trifecta of stimulus provided by low yields, low oil prices and currency depreciation are supporting countries across much of Asian and Europe; while the Americas are facing a more challenged growth outlook. For currencies we think this slows the pace of USD strength and EUR weakness.”
Key Quotes
“There are significant changes contained in the outlook, which we summarize as:
World growth: stable at 3.5% in 2015.
Downgrades to GDP expectations for U.S., Canada and Latam; however the U.S. has fastest growth pace among advanced economies;
Upgrades to GDP expectations for Asia and Euroarea;
Recession risk decreased in all areas except LATAM, where it has jumped to 33%;
Deflation risk in Europe has been revised down to 30%;”
“Together we think these shifts reflect what is being slowly priced into markets, that the trifecta of stimulus provided by low yields, low oil prices and currency depreciation are supporting countries across much of Asian and Europe; while the Americas are facing a more challenged growth outlook. For currencies we think this slows the pace of USD strength and EUR weakness.”