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Takeaways from TradeTech FX in Paris September 20<strong>23</strong><br />
and moderator Roderick Ngotho<br />
(Independent) was focused on East<br />
Asia. Jen, noted how Mexican exports<br />
to USA had passed those from China<br />
as a result of reshoring. There was<br />
still substantial financial exposure to<br />
China, Mederios said, from the vast<br />
majority of stocks that Americans<br />
own. Indeed, we only need to look<br />
at the recent price action in Apple as<br />
anecdotal evidence, of how China can<br />
impact US companies.<br />
RECENT EVENT<br />
ACTIVE CURRENCY STRATEGIES<br />
I was also on a panel on active<br />
currency strategies panel, alongside<br />
Andreas Koenig (Amundi Asset<br />
Management), Frederick Fischer<br />
(Allianz Global Investors), Achim Walde<br />
(Metzler Currency Management) and<br />
Roderick Ngotho (Independent). It<br />
also included some thoughts on the<br />
dollar, where most of the panellists<br />
were bullish, I was the odd one out,<br />
suggesting some downside, citing<br />
that on a relative basis that our<br />
inflation forecasts suggested more<br />
downside in the US versus the other<br />
major economies, which would likely<br />
be bearish USD. We also discussed<br />
how currency strategies fitting in<br />
broadly, in terms of investing. Walde<br />
made the point that FX risk was a big<br />
component of your returns, citing an<br />
example with US stocks over the past<br />
few years, where returns for a local<br />
investor would have been 300% versus<br />
400% for a Eurozone denominated<br />
investor. Whereas FX is often seen<br />
as an afterthought, managing it can<br />
make a big difference!<br />
For CHF the situation was trickier, it<br />
was low yielding, and has steadily<br />
appreciated, and has had its currency<br />
account surplus recycled. There was<br />
also the factor that FX was a monetary<br />
policy tool in Switzerland. The topic of<br />
the dollar as a reserve currency also<br />
came up, although the consensus was<br />
that it was difficult to replace. One<br />
important point was that the liquidity<br />
in financial sector is what counts for<br />
a reserve currency, given that the<br />
proportion of financial transactions is<br />
50x the real trade.<br />
A later panel also with Stephen Jen<br />
(Eurizon), alongside Bridgette Le Bris<br />
(Ostium), Gustavo Mederios (Ashmore)<br />
LIQUIDITY & MARKET<br />
STRUCTURE<br />
As mentioned earlier the topic of<br />
execution was also a key part of<br />
discussions at the event. There was<br />
an enlightening panel on liquidity<br />
and market structure, featuring<br />
Tgetg Roethlin (UBS), Jay Moore<br />
(FX HedgePool), Jeremy Smart (XTX<br />
Markets), Simon Osterberg (SEB),<br />
16 NOVEMBER 20<strong>23</strong> e-FOREX
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