By eFXdata — Mar 15 - 08:37 AM
JP Morgan Research provides a playbook for how FX behaves during recession but a US recession is still not part of its forecast for the next six months,
"1. The broad USD index has on average strengthened by 10% around recessions (ranges between 6% and 19%). Most times, the strengthening occurred at the onset of the recession although 2008 was different," JPM notes.
2. USD, CHF, JPY & SGD are historically the top performers around recessions
3. In DM, NZD underperforms while EM weakens broadly vs. USD. EUR/USD has traditionally not been a good recession short unless it has been viewed as a growth currency prior to the recession," JPM adds.
JP Morgan Research/Market Commentary