- The uncertainty over the economic outlook is now arguably the highest it has been since the start of the pandemic in early 2020.
- While economic growth has been strong, as economies have largely opened up, the supply-side has struggled to keep up with resurgent demand, with the consequence being inflation.
- Globally, the Israeli shekel, Chinese yuan, and Taiwanese dollar appear to be the most "overrated" (or overvalued currencies).
- When looking solely at the major currencies, we see that the Swiss franc and Canadian dollar stand out among the rest as the most "overvalued" currencies.
- At this point in time, the most contrarian trade among the major currencies is to sell the Canadian dollar and the Swiss franc and buy Japanese yen and Australian dollar.
For further details see:
December 2021: Forex Relative Valuation And Trading Opportunities