No Delisting Conditions for EUR&JPY: Monetary Expression Suffers Hidden Worries

As expected, the Bank of Canada (BOC) cast a fairly hawkish message after its meeting, keeping the benchmark interest rate unchanged but implying a possible interest-rate increase and a scale-back on its purchases of government debt from CAD 4 billion to CAD 3 billion per week at the end of next year. At the same time, BOC has been extremely optimistic about the prospect of Canadas economy in spite of the resurgent pandemic at home, thereby possibly announcing a decline in its debt purchases again in its next meeting on June 9th. In general, BOC has taken the lead in delisting. Needless to say, it is out of question that CAD will embrace a bullish market in the context of tight monetary policies by BOC.

Financial market speculates about which country will follow suit. Definitely, Australia and New Zealand are the most popular candidates due to the same role as a commodity exporter as Canada. Their economic conditions have improved dramatically, keeping the pandemic under control, forming travel bubbles, embracing a bullish real estate market, and witnessing the increase of commodity prices. It is worth noting that the U.K. has enjoyed a thriving economy based on its statistics announced recently. The Bank of England (BOE) may boast conditions to delist in the second half of this year since the pandemic is under control domestically with the help of vaccination, and its real estate market bears witness to a bullish trend promoted by people from Hong Kong, China.

However, concerns should surface about several important elections scheduled in early May in Britain, among which the Conservative Party led by Boris Johnson is possible to suffer a loss of seats in local elections. Parliamentary elections will also be held in Scotland. Given no accidents, it is predicted that Scottish National Party (SNP), supporting and campaigning for Scottish independence, will embrace a landslide victory that is followed by a possible independence referendum. Therefore, please think twice before buying GBP.

On the contrary, countries bereft of delisting conditions can also be conjectured, thereby considering whether their currencies are under possibly continuous pressure. In my opinion, European Central Bank (ECB) and the Bank of Japan (BOJ) dont see powerful delisting conditions so that EUR and JPY may have an impending bearish market. In addition, Europe is threatened by warfare as Russia is massing troops along the Ukrainian border, resulting in a war on the verge. Severe geopolitical tension in the region has compromised EUR to some extent.

Coping with the resurgent pandemic nationwide, Japan may announce the cancellation of Tokyo Olympics at any time, which is a hard hit to its economy. As such, from my personal view, ECB and BOJ are the last two boasting delisting conditions in the near future. In short, currencies featuring delisting conditions can see a bullish market whereas their counterparts without these are possible to be sluggish continuously.