UBS expects disappointment
Analysts at UBS say expectations about Trump's effect on growth and inflation are too optimistic. They expect USD/JPY to fall to 112 in three months; 110 in six months and 105 in 12 months. USD/CAD is up 60 pips to 113.20 today.
"Market expectations on Trump's fiscal policies are elevated and may be disappointed," the analysts at UBS Wealth Management said. "Expectations on U.S. growth and inflation are likely to consolidate further, given that any fiscal boost from the incoming Trump administration will take time to materialize"
On the yen side, they said BOJ policies are unsustainable and there is a risk of a taper later this year.
