Analysts at Rabobank see the US Greenback appreciating towards the Euro and the Pound over the following few months. They level out that the relative resilience of the US financial system means that it will likely be a while earlier than financial coverage is eased.
Key quotes:
“Fitch’s resolution to downgrade the US credit standing has turned consideration to subsequent week’s Treasury provide, although the USD’s secure haven enchantment means that impression from the Fitch resolution is more likely to be restricted.”
“Fed coverage stays within the driving seat. Whereas we count on that Fed funds have probably peaked, the next for longer outlook is USD supportive.”
“Whereas we count on that Fed charges have probably peaked, the relative resilience of the US financial system means that it will likely be a while earlier than coverage is eased. This issue mixed with a rising consciousness that the basic drivers behind different currencies could possibly be deteriorating ought to provide the USD broad-based assist. We keep a 3-month EUR/USD forecast of 1.08.”
“In opposition to a backdrop of stagnating financial exercise in Germany, we see lengthy EUR positions as weak given the chance that ECB charges could have peaked already final month. We additionally see lengthy GBP positions as weak given weak progress within the UK and the optimism expressed by the BoE concerning the potential for UK CPI inflation to ease.”
“We count on GBP/USD to melt to 1.26 on a 3-month view.”
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