USD: Greenback’s sleepy story to continue over short term
The greenback has been the lagger across FX to begin the year. The sleepy greenback story is likely to continue in the short term given the recent rally in Treasury yields and the current pace of the Fed’s QE buying which remains quite considerable. What could reawaken the USD bears is the influx of liquidity that’s expected to come as Congress passes the upcoming relief bill. From prior experience, we know that this can materially dent the USD against other currencies. While incoming data should be supportive, we expect the Fed to look past this in the near-term and for the USD to continue to trade to the downside in the near term before beginning to outperform over the next year.
CAD: Loonie appreciation way too rich for the economy to handle
The loonie continues to soar to heights not seen since 2018. Multiple factors have accounted for this appreciation including the greenback’s reversing trend and the bolstering of the price of oil over the last month. Given the correlation of the CAD vis-à-vis Oil, most expect the loonie to appreciate over the coming months likely hovering around 1.24 toward the middle of the year. That said, the appreciation in the loonie may be too rich for the economy’s blood as the short-term outlook has clouded the longer-term fundamentals of including a massive trade deficit. Having seen a larger contraction in 2020, Canada continues to have a tighter set of public health constraints in Q1, and a lag in vaccinations will widen the economic gap to the US in the first half of this year.
EUR: Cautious optimism for euro strength ahead
The ECB remains significantly concerned about the economic drag of a possible euro appreciation with talk of additional easing in the deposit rate now coming back on the table. With eurozone vaccinations set to pick up into Q2, most analysts expect the macro economy to pick up steam with a Q2 rebound fueled by an easing in lockdown restrictions and stronger data prints. Our analysts are cautiously optimistic of a stronger euro toward the latter part of the year.
GBP: Vaccine rollouts continue to support the currency
The combination of an upbeat economic data, an accelerated vaccine rollout, and the avoidance of l Brexit has set the table for the GBP to rapidly appreciate. Although the UK economy is set to suffer a material contraction in Q1 due to the impact of a third national lockdown, the BoE still assumes that the economy will end the year in line with previous estimates. Consequently, the BoE anticipates quarterly growth averaging in excess of 3% for the rest of 2021, despite job shedding as the furlough scheme winds down. The prospect of higher inflation and accelerating growth supports a stronger performance in trade weighted Sterling over the coming months.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.