HSBC research note on the impact of negative rates, saying the effect on economies is complex and the result therefore for FX is unclear.
Negative interest rates contribute to a breakdown in the relationship between rates and FX
- don't have a notably direct negative impact on FX
- may even mean that FX markets start to pay even less attention to rates, rather than worrying about them more
More:
- currencies weaken iwhen traders anticpate negative rates. but the impact lessens soon after they take effect
- little evidence of negative policy rates causing deposit outflows
- negative rates are not new
- market is focused on relative interest rate differentials
