This week, focus on some strategies proposed by UBS for 2021, with strong convictions on certain currency pairs. A few words then on factorial strategies. We end with the consensus that is in the process of settling on a slide of the dollar in 2021, in particular against the euro, a theme already discussed last week.

(Zonebourse.com)

* Some UBS bets in 2021

UBS has listed the rise of the Chinese CNY against the USD among its top 10 macro "trades" in 2021. The signals are green for 2021 for the yuan, say the Swiss bank's forex traders, who see "little reason for a reversal of recent CNY gains, which could even increase them with the possibility of a reduction in prices. customs fees". If this were the case, the USD/CNY parity could return to the 6.30 to 6.40 range, against 6.5695 currently.

USD against four Asian currencies in 2021

A few other convictions of UBS? Long on the RUB/ZAR pair, because the ruble sank this year and the rand showed the strongest rise of emerging currencies in the last six months and started to correct. And Long on CAD/COP, because the bank thinks Colombia could lose its "BBB-" and therefore its "investment grade" status at two of the big three agencies. At the same time, the Canadian dollar's fundamentals are improving, making it one of UBS's hottest FOREX players for 2021.

* Currency factor strategies struggling

A little thought about currencies now. The excellent Joachim Klement recently published a paper entitled "Central banks have killed currency trading". The economist first explains that the usual factor strategies on the currency market no longer work very well (apart from the "carry trade" outside the USD) from the moment they are the subject of publications revealing their existence. Combined, however, the strategies made it possible to make money. But only until 2008, that is to say from the moment when the central banks massively entered the dance. “The new monetary policy regime put in place after the financial crisis made systematic currency gains impossible,” he explains.

* Haro on the USD

The fall of the American dollar risks being one of the most bottled bets of the year 2021, what the Anglo-Saxons call a "crowded trade". Several strategists have mentioned in recent weeks a weakening of the USD against the EUR in particular. This is the case of Didier Saint-Georges at Carmignac. "We do not see how any scenario for 2021 could save the depreciation of the dollar", he explained, in particular because in the absence of leverage on rates and given the room for maneuver available to the Fed, monetary creation in the United States should be in full swing.