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No reason to fight dollar strength this week - ING Central bank communication at this week's Sintra conference in Portugal has stayed pretty hawkish. The core message seems to be that low unemployment rates have allowed economies to withstand large tightening cycles reasonably well, meaning that inflation has not fallen as much as expected. Expectations for the...

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Adam Cole, Chief Currency Strategist at RBC Capital Markets, has highlighted recent policy shifts from the Swiss National Bank (SNB), the persistent threat of imported inflation, and increasing levels of verbal intervention in Japan. "While the Swiss National Bank (SNB) may have let down some investors with a 25bp rate hike last week when many were hoping for a...

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Gold Price Forecasts Revised Lower For Year-End 2023 And 2024 At ABN AMRO In her extensive XAU strategic note to clients, Georgette Boele, Senior Economist at ABN AMRO warns of a downgrade to the bank's 2023 and 2024 gold price forecasts. The analyst cites the gold price being close to all-time highs, a level that should it fall, might not be seen for another...

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Currency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to...

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2023-2024 exchange rate forecasts from Nordea As far as Federal Reserve policy is concerned, Nordea has revised its forecasts and now expects that there will be two further rate hikes with a 25 basis-point hike in July and another hike in the Autumn. It also expects that the Fed will be slower to cut rates and adds; “The sticky core inflation picture and the...

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More hawkish global central bank policy actions have increased reservations over the global economy and the latest Euro-Zone data was also significantly weaker than expected. Weaker risk conditions will also tend to weaken the Euro, especially with scope for defensive dollar demand. In this context, confidence in the global economy will need to rebound for...

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The Japanese Yen (JPY) recently bounced back from its lowest point in seven months against the US Dollar (USD), following a statement from Japan's leading currency official that they are open to considering all possibilities regarding the currency. The recent depreciation of the Yen has been attributed to a policy gap between the accommodative Bank of Japan (BoJ)...

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Currency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to...

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Foreign exchange strategists across global financial institutions have been setting out their predictions for the future performance of the EUR/USD, presenting an amalgamation of analyses that span from modestly optimistic to overly bearish. Euro-Dollar rate predictions are pinned upon factors ranging from central bank decisions, inflation metrics, and global...

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2023-2024 exchange rate forecasts from Nordea As far as Federal Reserve policy is concerned, Nordea has revised its forecasts and now expects that there will be two further rate hikes with a 25 basis-point hike in July and another hike in the Autumn. It also expects that the Fed will be slower to cut rates and adds; “The sticky core inflation picture and the...

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BNP Paribas 2023-2024 Exchange Rate Forecasts Capital Outflows will Undermine the Dollar A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen. It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our...

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BNP Paribas 2023-2024 Exchange Rate Forecasts Euro Can Secure Capital Inflows The bank maintains a broadly constructive stance towards the Euro. It expects that the ECB rate hikes and quantitative tightening will encourage foreign inflows and domestic repatriation. Although BNP expects that energy prices will strengthen, it does not expect a return to 2021...

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BNP Paribas 2023-2024 Exchange Rate Forecasts Capital Outflows will Undermine the Dollar A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen. It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our...

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BNP Paribas 2023-2024 Exchange Rate Forecasts Capital Outflows will Undermine the Dollar A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen. It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our...

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2023-2024 Exchange Rate Forecasts From MUFG Pound Sterling: BoE Forecasting Errors Increase GBP Risk Profile MUFG has significant reservations surrounding the Pound outlook. As far as inflation is concerned, it sees significant risks over the medium-term implications. It notes; “The sense that the UK has a bigger inflation problem is creating downside risks...

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2023-2024 Exchange Rate Forecasts From MUFG Growth Concerns hamper Commodity Currencies MUFG notes important uncertainty over the outlook for Reserve Bank of Australia (RBA) policy. On balance it expects that the RBA will not hike rates again. As far as the currency is concerned, it adds; “We continue to see AUD/USD moving higher but assume underperformance...

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2023-2024 Exchange Rate Forecasts From MUFG Growth Concerns hamper Commodity Currencies MUFG notes important uncertainty over the outlook for Reserve Bank of Australia (RBA) policy. On balance it expects that the RBA will not hike rates again. As far as the currency is concerned, it adds; “We continue to see AUD/USD moving higher but assume underperformance...

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2023-2024 Exchange Rate Forecasts From MUFG Japanese Yen: Long-Term Pressure for Yen Gains As far as the yen is concerned, the Bank of Japan has continued to resist policy tightening, but MUFG suspects that the position could change very quickly. It notes; “We suspect the BoJ could pivot quickly and alter YCC without much warning.” The bank also expects...