Tag Archives: USD currency forecast

Limited upside for the dollar against the yen, but significant downside will take time.While widening interest rate differentials are supportive of the US dollar against the yen, if rates rise too far and too fast, they can help the yen against the dollar, as recent financial market volatility has shown. In October, the Japanese yen appreciated by 1.9% against the dollar and outperformed all other major currencies.Coupled with extreme fundamental yen undervaluation, the potential for the...

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...

The euro rose sharply against the US dollar after a speech by Mario Draghi today. We still expect the US dollar to strengthen in the coming months.The euro appreciated significantly against the US dollar (by as much as 1.4% at one stage) on 27 June, reaching a 10-month high. The main reaon was a speech by ECB President Mario Draghi at the ECB forum on central banking at Sintra. To a lesser extent, the ongoing struggle to find legislative consensus among the US Republican Party, highlighted...

Relatively robust growth in the US and an active Fed suggest markets are too bearish on the USD versus the euro, but the greenback’s potential is limited.The euro has significantly appreciated against the US dollar since the start of the year (roughly 7% by 8 June). The single currency has benefited from strong activity in Q1, higher inflation and reduced political uncertainties in the euro area, especially after the French presidential election. Meanwhile, the US dollar has been damped by...