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7 Jan 2015
EUR/USD: 12 mth forecast revised lower to 1.15 - Rabobank
FXStreet (Bali) - Rabobank has revised lower their 12 mth forecast for EUR/USD to 1.15 on renewed political uncertainties in Greece and ECB QE expectations.
Key Quotes
"Yesterday we revised lower our 12 mth forecast for EUR/USD to 1.15 on the back of renewed political uncertainties stemming from Greece and given the recent step up in dovish rhetoric from ECB President Draghi in recent weeks."
"This revision to our EUR/USD outlook had the effect of dragging down our cable forecast and we now expect cable to hold around the GBP/USD1.52 area for most of this year. While will have revised down our cable view we still see the potential for bouts of volatility in the coming months."
"The approach of the UK general election in May could justify some nervousness in GBP. That said, the general performance of the USD could have a more significant impact on GBP/USD."
"Since the middle of last year the strengthened tone of the USD has been centred on the view that the Fed will be hiking rates in the middle of this year. However, US inflationary pressures remain moderate."
"Despite the improved growth outlook in the US, soft food and energy prices in addition to the stronger USD suggest there are downside risks to inflation. In our view, the Fed is unlikely to hike interest rates before the end of 2015. If the market pushes back its forecasts for Fed interest rate policy, there is scope for USD pullbacks which would be reflected in EUR/USD and GBP/USD."
Key Quotes
"Yesterday we revised lower our 12 mth forecast for EUR/USD to 1.15 on the back of renewed political uncertainties stemming from Greece and given the recent step up in dovish rhetoric from ECB President Draghi in recent weeks."
"This revision to our EUR/USD outlook had the effect of dragging down our cable forecast and we now expect cable to hold around the GBP/USD1.52 area for most of this year. While will have revised down our cable view we still see the potential for bouts of volatility in the coming months."
"The approach of the UK general election in May could justify some nervousness in GBP. That said, the general performance of the USD could have a more significant impact on GBP/USD."
"Since the middle of last year the strengthened tone of the USD has been centred on the view that the Fed will be hiking rates in the middle of this year. However, US inflationary pressures remain moderate."
"Despite the improved growth outlook in the US, soft food and energy prices in addition to the stronger USD suggest there are downside risks to inflation. In our view, the Fed is unlikely to hike interest rates before the end of 2015. If the market pushes back its forecasts for Fed interest rate policy, there is scope for USD pullbacks which would be reflected in EUR/USD and GBP/USD."