The Japanese yen is expected to be the strongest performer amongst major currencies for the remainder of 2016, according to a Bloomberg poll of 100 foreign exchange traders, strategists and corporate treasurers.     

Some 57% of respondents expect the yen to be the strongest performer against the US dollar with 15% backing the Swiss franc and 12% opting for the Australian dollar. 

Conversely, the Mexican Peso will continue to underperform for the remainder of 2016, according to a separate poll by Bloomberg of 120 Mexican foreign exchange corporate and sales executives, traders and strategists. 

The results of the survey show that 57% of respondents thought the currency would continue to lag, while 19% said that the currency’s losses have been excessive. Only 11% think that the peso is over the hump and will not see any more significant losses. Meanwhile, 45% held that their currency was undervalued.

Ineffectual officialdom

Both surveys suggested that respondents believe the US Federal Reserve’s rate hikes are the key reasons for their currency’s depreciation against the dollar.

According to the Mexican survey, the majority think that Mexico’s central bank Banxico’s measures to quell currency volatility, such as the rate hike in February of this year, have been largely futile, with only 5% saying Banxico had been a crucial player in supporting the peso.

A similar conclusion was reached in the other survey, in which 55% of respondents said they did not believe that Japanese economic officials’ unilateral actions will be useful.

However, Yuki Masujima, Bloomberg Intelligence’s Japan economist added: “There are clear investor concerns over a potential Fed rate decision and the slowing Chinese economy, and how these issues could impact the yen and other Asian currencies, which now might be further accelerated with uncertainties arising from Brexit.”