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Foreign exchange analysts at BNP Paribas suggest the Euro (EUR) is tipped to rise against the Pound Sterling (GBP) in the near-term outlook. They believe that although UK data has been surprisingly strong recently, the underlying data strength remains subdued. "UK data have been surprisingly strong recently, but surprises tend to mean revert and underlying data...

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Thought of the day The gold price has come off from its recent high as US President Joe Biden expressed confidence in avoiding a government default amid progress in debt ceiling negotiations, better US data, and hawkish comments by some Fed members. At around USD 1,975/oz at the time of writing, gold is now around 4% lower than the year-to-date high reached...

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Commodity Currencies Still Vulnerable Danske expects that both the Bank of Canada and Federal Reserve will hold rates steady over the second half of 2023. It does, however, consider that market pricing is more out of line for the Federal Reserve than the Bank of Canada which will lead to a weaker bias for the Canadian currency against the US...

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Commodity Currencies Still Vulnerable Danske expects that tighter financial conditions and vulnerability in the global economy will tend to undermine commodity currencies. As far as the Australian dollar is concerned it adds; “With the global growth backdrop remaining weak, recovery in Chinese manufacturing losing steam and metal prices declining, the outlook...

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Pound Sterling Forecast: Extended Range Trading for EUR/GBP Danske expects that the Bank of England will increase interest rates for a final time in June. It notes that at least one further rate hike is priced in by markets which will limit scope for Pound buying. It does, however, consider that the Pound is slightly undervalued which will underpin the...

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Danske expects that the Bank of England will increase interest rates for a final time in June. It notes that at least one further rate hike is priced in by markets which will limit scope for Pound buying. It does, however, consider that the Pound is slightly undervalued which will underpin the currency.

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Yen Undervalued, Yuan to Lose Ground Danske Bank continues to expect that the Bank of Japan will tighten monetary policy this year, although the timing remains very uncertain. While a key argument against the Euro is that the currency is overvalued, it considers that the Japanese currency is substantially undervalued. According to Danske; “Overall, USD/JPY...

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Euro Outlook: Euro-Zone Economic Concerns will Continue Danske expresses reservations over the Euro-Zone performance after a run of generally disappointing data. It adds; “We expect this weakness to become more pronounced in H2 as the full impact of the last year’s monetary policy tightening hits the real economy. Overall, we think the US economy will prove...

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US Dollar Outlook: Federal Reserve will Resist Rate Cuts While Danske Bank agrees with the market assessment of the June Federal Reserve policy decision with rates on hold, it does not consider that later-year pricing is correct. The bank considers that the Fed will need to be more hawkish to maintain downward pressure on inflation. Danske also considers that...

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FX analysts at Danske Bank, UniCredit, UOB, and ING suggest that the near-term direction of the EUR/USD exchange rate is somewhat uncertain, with the potential for both downside risks and temporary upticks. Factors such as the state of the US economy, the next central bank meetings, and risk-off sentiment related to the US debt-ceiling situation are expected to...

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Foreign exchange analysts at ING have updated their latest currency forecasts and predictions for the Pound Sterling Sterling will be influenced by global economic and financial conditions. It notes; “Sterling’s correlation with risk assets has fallen a lot this year – a factor probably helping sterling at the moment.” The Pound will still tend to be vulnerable...

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According to strategists at ABN AMRO, the price of gold in US Dollars could be set to ease slightly to $2000 in 2023, before rallying in value to $2200 in 2024. Of course, one of the biggest advantages to include gold in your portfolio is to hedge against inflation. Despite a rally of over 10% this year, the price of gold may face limited upward movement from...

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Foreign exchange analysts at Credit Agricole suggest that while uncertainty surrounding the US debt ceiling has been a key factor impacting the US Dollar (USD) recently, a resolution could potentially pave the way for a more sustainable recovery of the currency. The recent ambiguity associated with the US debt ceiling - which is a legislative limit on the amount...

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Foreign exchange analysts at Credit Agricole suggest that while uncertainty surrounding the US debt ceiling has been a key factor impacting the US Dollar (USD) recently, a resolution could potentially pave the way for a more sustainable recovery of the currency. The recent ambiguity associated with the US debt ceiling - which is a legislative limit on the amount...

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BOJ governor Kazuo Ueda is a scholar, so if the BOJ does conduct a review, he will probably be forced to recognize the impossibility of the BOJ’s current monetary policy. With the phase of rate hikes also coming to an end in the US, the dollar/yen pair’s topside will gradually grow heavier from here on.

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Debt ceiling talks still in limbo US House Speaker McCarthy gave mixed comments on the debt ceiling talks. He said they set the stage to carry on further conversations and President Biden agreed to appoint a couple of people from the administration to negotiate directly with his team. McCarthy also said there is a lot of work to do in a short amount of time and...

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According to strategists at ABN AMRO, the price of gold in US Dollars could be set to ease slightly to $2000 in 2023, before rallying in value to $2200 in 2024. Of course, one of the biggest advantages to include gold in your portfolio is to hedge against inflation. Despite a rally of over 10% this year, the price of gold may face limited upward movement from...

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Australia: Jobs, wage data and RBA minutes on tap Australia’s labor market data is out on Thursday and expected to show the addition of 25k jobs in April after 53k jobs added in March, with the unemployment and participation rates seen steady at 3.5% and 66.7% respectively. Just a day ahead of this release, we also get the Q1 wage price index which could be a...