Tag Archives: Currency outlook

Extreme negative sentiment on the greenback and improving US data should pave the way for a significant US dollar rebound.Following disappointing US economic data and another failure to form a Republican majority on key legislation, the US dollar has slipped to a 10-month low, at 94.68 on 18 July.This extreme USD weakness has led to strong negative market sentiment, as highlighted by speculative positions on the futures market.Although we acknowledge that the foundations (rising inflation...

Although close to the end of a long-term up-cycle, the dollar has the potential to recover ground lost recently given the outlook for Fed rate rises and balance sheet reduction.Our latest forecasts for major currencies over the coming months can be summarised as follows:US dollar. In terms of duration and valuation, the USD up-cycle is likely close to ending. However, the USD is likely to remain strong on the back of robust US growth and the outlook for inflation. It should also benefit from...

Given a widening real yield differential, we see the dollar continue to rise, especially against the yen, while further sterling downside looks limited.Our latest forecasts for individual currencies in 2017 can be summarised as follows:US dollar. The USD is likely to remain strong on the back of an improving US growth and inflation outlook as well as continued monetary policy divergence. Our base case scenario is for a Trump administration that puts the emphasis on growth without too much by...

Recent policy meetings at important central banks chime with our currency outlook for major currencies in the coming months.US dollar/euro. The recent break to a fresh 14-year price low after 21 months of consolidation opens the way for a move towards parity in the EUR/USD rate in the next few months. Still, growth in the US is likely to be hurt in the coming months by the ongoing tightening in monetary conditions brought about by the stronger USD and the rise in interest rates before the...