Analysts at Rabobank look the US Buck appreciating in opposition to the Euro and the Pound over the subsequent few months. They level out that the relative resilience of the US economy suggests that it is miles a while sooner than monetary coverage is eased.
Key quotes:
“Fitch’s decision to downgrade the US credit ranking has grew to change into attention to subsequent week’s Treasury provide, though the USD’s precise haven attraction suggests that affect from the Fitch decision is inclined to be small.”
“Fed coverage stays in the using seat. While we ask that Fed funds beget likely peaked, a increased for longer outlook is USD supportive.”
“While we ask that Fed rates beget likely peaked, the relative resilience of the US economy suggests that it is miles a while sooner than coverage is eased. This ingredient mixed with a rising consciousness that the basic drivers at the succor of fairly about a currencies would possibly be deteriorating ought to peaceful provide the USD astronomical-basically basically based make stronger. We succor a 3-month EUR/USD forecast of 1.08.”
“Against a backdrop of stagnating financial exercise in Germany, we look prolonged EUR positions as inclined given the danger that ECB rates would possibly per chance per chance beget peaked already final month. We furthermore look prolonged GBP positions as inclined given out of date enhance in the UK and the optimism expressed by the BoE concerning the probably of UK CPI inflation to ease.”
“We ask GBP/USD to melt to 1.26 on a 3-month look.”
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