USD, CNY and JPY: Fundamental indicate they should be weak in 2019  - Natixis

Analysts at Natixis, point out that the fundamental mechanisms indicate that the renminbi, the dollar and the yen should be weak in 2019. 

Key Quotes: 

“So thanks to the fundamentals, the euro will probably become a strong currency compared with the renminbi, the dollar and the yen, with the exchange rates between the other three currencies changing little if all three are weak.”

“The Chinese economy is likely to remain weak in 2019, due to the simultaneous weakening of consumption, corporate investment and residential construction. If Chinese growth is actually weak in 2019, capital outflows should continue, and as the central bank at a certain stage will refuse to lose more foreign exchange reserves, the renminbi should weaken.”

“The Trump administration is implementing an expansionary fiscal policy at full employment, which will lead to an increase in the US external deficit. In the past (1985-89, 2002-2008), this configuration always led to a depreciation of the dollar, and this could be all the more the case as the rate hikes now will come to a halt in the United States.”

“The yen has sometimes (still in early 2019) been used as a safe haven, yet Japan will in 2019 be the only large country where liquidity is growing and where the central bank continues to monetise public debt.”