Economics & Strategy – Currency & Foreign Exchange: Third

Hans-Guenter Redeker’s seven-member squad at Morgan Stanley rises from runner-up to third place. The strategists provide “great short-term tactical calls, while maintaining and clearly explaining their longer-term views,” declares one buy-side backer in New York. With analysts in Hong Kong, London and New York, the team covers the currencies of the Group of Ten nations and predicts that the yen — already at its lowest point against the dollar and the euro since 2010 — will fall even further. “When the yen is weakening, you have higher import prices, which affect consumer prices,” Redeker explains. “And when people have the idea that prices are rising — that prices tomorrow and in a year’s time are more expensive — then you spend your money right away, so monetary velocity increases.” It can be a vicious cycle that spurs inflation, which is the scenario that Japan is facing: “There’s much more yen weakness to be anticipated,” he declares. — Carolyn Koo