11/25/2023 0 Comments Wells fargo foreign currency rates![]() ![]() On EUR/USD, MUFG summarised “We still believe current price action is a temporary setback for the pair rather than a sustained reversal lower given our expectation that further US dollar weakness will lift the pair back into a higher range between 1.1000 and 1.1500 through the rest of this year.” Nevertheless, the end-2023 EUR/USD forecast has been revised to 1.12 from 1.10 with the 2024 forecast increased to 1.18 from 1.12. It adds “Significantly higher EUR levels may have to await more progress in closing that differential (note market pricing anticipates much faster rate declines in the US versus Europe next year) or more evidence that the Eurozone is closing the growth gap on the USD.” Scotiabank points to potential dollar vulnerability “Combined deficits (fiscal and current account) edged a little over 10% of US GDP in Q1, the biggest joint shortfall since 2012 outside of the Covid period.” MUFG has adjusted its forecast “It is becoming harder to justify hiking rates further into restrictive territory when inflation has peaked, the euro-zone economy continues to remain weak and there is building evidence that tighter monetary policy is feeding through to the euro-zone economy.” On the other hand, we doubt the market's view that the ECB will cut rates as early as 2024." Joerg Kraemer, chief economist at Commerzbank commented "Because we expect a significant decline in inflation and a recession in the second half of the year, we continue to not forecast a rate hike in September. The Euro, however, declined sharply after President Lagarde was reported as saying that the bank did not have more work to do in raising rates. The overall rhetoric was slightly less hawkish with the ECB matching the Fed in stating that it might or might not raise interest rates again in September. The ECB increased interest rates by 25 basis points at the latest policy meeting with the refi rate at a record euro-era high of 4.25% and in line with consensus forecasts. The risk of a more hawkish Fed policy update has now passed leaving it vulnerable to further weakness.”ĬIBC is still backing another rate hike “We still think that a September hike is probable, with job gains likely to remain above the roughly 100K pace that Powell has cited is consistent with a labor market that isn't tightening further.” ![]() MUFG added “Overall, the developments do not alter our outlook for the US dollar to weaken further this year. It adds “It supports our view that if inflation continues to slow in the coming months, we expect the Fed to signal a pause to their hiking cycle at either the Jackson Hole symposium towards the end of August or at the September FOMC meeting.” MUFG still expects a policy shift within the next two months. That said, we would not be shocked if the FOMC squeezed in one more rate hike between now and the end of the year.” ![]() The latest PCE data recorded a decline in the core annual rate to 4.1% from 4.6% and the quarterly increase in employment costs was held to 0.9%, both figures slightly below expectations.Īccording to Wells Fargo “Our base case remains that today's rate hike will be the FOMC's last of this tightening cycle. He also noted that there are two further employment reports and inflation releases ahead of the September policy meeting. In this context, there was no plan to raise or keep rates on hold in September with all options open. The Federal Reserve increased interest rates by 25 basis points to 5.50% at the latest policy meeting, in line with consensus forecasts.įed Chair Powell was very keen to emphasise that future rate decision would be data dependent. Overall, with increased speculation that ECB rates have peaked, EUR/USD gains will have to be built on US disinflation and strong confidence that US rates have peaked. With expectations that the Federal Reserve that would decide against further rate hikes, the Euro to Dollar (EUR/USD) exchange rate posted gains to 1.1150 just ahead of the ECB policy decision.Īlthough the ECB raised rates, in line with expectations, a perceived dovish slant triggered sharp losses with EUR/USD sliding to lows below 1.0950 before a recovery to above 1.1000 after slightly weaker than expected US data. “It remains our view that the USD will remain well supported into year-end and that it will recover more ground against both the EUR and GBP over the coming months, ” said FX strategists at Rabobank. The Euro to Dollar exchange rate (EUR/USD) is quoted at 1.10179. Pound to Dollar exchange rate ( GBP/USD) is trading at 1.28504 with markets settled for the weekend. The latest foreign exchange analysis by Rabobank indicates that the Pound Sterling (GBP) and Euro (EUR) currencies are tipped to lose ground against the US Dollar (USD) over the next few months.Īt the time of writing, the Pound to Euro exchange rate ( GBP/EUR) was quoted at 1.16576, relatively unchanged on the daily opening levels. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |