EROTF - May 2022: Forex Relative Valuation And Trading Opportunities

• The uncertainty over the economic outlook is now arguably the highest it has been over the past several years.
• The war in Ukraine is having a significant impact on trade flows - particularly in agricultural commodities. Alongside China lockdowns, bottlenecks look set to worsen in the near term.
• On balance, the Russian Ruble, Mexican Peso, and Singapore dollar appear to be the most "overrated" (or overvalued) currencies.
• When looking solely at the major currencies, we see that the Canadian dollar and Australian dollar stand out among the rest as the most "overvalued" currencies.
• If you are a contrarian investor, buy the Japanese yen and the British pound.

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