Jean-Marie Mercadal, Deputy Chief Executive Officer in charge of Management at OFI AM

L'Agefi: What can be the effects on currencies of the wait-and-see attitude of central banks in the face of the second wave of coronavirus?

Jean-Marie Mercadal: During this severe crisis that caused great volatility in equities, the main exchange rates remained fairly stable. There is simply a rise in the euro-dollar from May, rather as a result of the decision to issue debt for the first time on behalf of the European Commission (EC), which removes the risks of dislocation of the single currency. The reason for this relative exchange rate stability can be explained by monetary policies following the same logic everywhere: lower rates and convergence around 0%, which means that there is no longer any specific advantage for this or that currency in terms of yield. The next possible developments of the dollar and the pound against the euro will probably be linked to economic developments, with yet another unknown on the nature of Brexit.

How to explain your optimism about the dollar-yen?

The yen has benefited from its defensive character: it tends to rise in a phase of great uncertainty because Japanese investors repatriate their capital, while they are rather "natural" investors internationally in normal times. We expect some normalization in the long term, which should push the yen down somewhat, which is also quite expensive according to fundamental analyses.