The Canadian dollar is due to take a breather following a significant rally versus its US counterpart since mid-2017. However, we see modest further upside over 2018 and 2019 as oil prices continue to head up and Canadian monetary policy tightens more aggressively than is currently anticipated by rate markets.
A risk-off environment, weak balance of payments dynamics and loose fiscal policy will see the Ugandan shilling continue to slide over the coming months despite an aggressive monetary tightening cycle.
Despite its strong fundamentals, the TWD is facing downside pressure from the ongoing weakness in competitors' currencies. As such, we see continued weakness in the near term towards TWD32.00/USD. Over the long-term, an undervalued real effective exchange rate, low inflation, and a large current account surplus will lend support to the currency, limiting weakness and providing stability.
The Swedish central bank's surprising decision in February to cut its policy rate into negative territory and launch quantitative easing has led us to downgrade our forecasts for krona appreciation. Nonetheless, we still see modest krona upside versus the euro over a multi-year horizon, supported by a relatively strong growth outlook and a sizeable current account surplus.
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