UBS FX strategist Geoffrey Yu: It’s the policymakers who move markets now

How did you first become involved in forex and what are your particular areas of interest?

I joined UBS in Singapore in July 2006, and am now senior FX strategist. I’m responsible for G10 currency research, but also have a strong interest in emerging market currencies.

You’ll be taking part in a panel discussion at City A.M.’s Active Trader conference called Masters of Forex. What do you expect to discuss?

I expect we’ll be covering the current major themes in the markets and the major currencies: dollar, yen, G10. But given the way the markets are trading, anything is interesting, and there are many issues to discuss. The Fed, the Eurozone, normalisation, and Japan’s attempts to reflate are just a few of them.

One of your areas of interest is China. How has recent poor Chinese data effected the Forex markets and what are the implications?

The Australian dollar and other commodity-backed currencies like the Brazilian real and South Africa rand have obviously been affected. But other emerging market currencies are also commodity-backed, so if Chinese growth unwinds that will have a substantial impact. Emerging markets need new growth models.

Given Japan’s attempts to weaken its currency, will we see similar moves elsewhere? And will Japan meet its target of achieving 2 per cent inflation?

Politics is always important for currency trades, as Japan shows. But in the UK and especially in Europe, it’s less of an issue. Japan will likely be successful in achieving its target. But it’s important that the country achieves good inflation, not bad. If you smash your currency, you could end up importing bad inflation.

Do you have any advice for FX novices?

Follow policymakers religiously. They’re the ones who move markets these days. If you get policy right, then you’re halfway there. Then it’s all about timing.

Geoffrey Yu is senior FX strategist at UBS Investment Bank.