• EUR/USD: Last month we cut our three-month and six-month EUR/USD forecast to 1.30. This target was reached last week, which poses the question: what now? Until a trough in the global slowdown is confirmed and until the new de facto zero rate ECB regime is fully priced, we expect the euro to remain under under pressure As pressure. As aa result result, we we have have cut cut the the 3M forecast to 1 28 3M forecast to 1.28 – with with risks risks skewed skewed toward toward aa temporary temporary undershooting of this new target. Short euro positions are stretched, however, and global recession risks are priced too excessively on financial markets. Hence, we still look for a rebound in EUR/USD during H1 12, but will await better levels and a more attractive risk/reward before positioning accordingly.
• Scandies: Even though we believe that the Riksbank will cut rates aggressively throughout 2012 we believe that a lot of bad news is embedded in the Swedish krona already. Hence, we have cut our EUR/SEK forecast on a three-, six- and 12-month horizon to 9.10, 9.00 and 8.70, from 9.30, 9.10 and 9.00 previously. We have also cut our EUR/NOK forecast marginally to 7.65, 7.60 and 7.50 on a three-, sixand 12-month horizon from 7.70, 7.65 and 7.50 previously. Norwegian outperformance in respect of growth, money market rates and fundamentals is expected to keep the Norwegian krone well supported in 2012. For the next six months we believe that foreign inflow will continue maintain downward pressure on EUR/DKK. But the Danish central bank will continue to mitigate the inflow with lower rates and/or intervention in the market. We see EUR/DKK at 7.43, 7.43 and 7.44 on a three-, six- and12-month horizon.
Please see the below PDF for the full report.
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Main Forecast Changes
Published 12/21/2011, 09:23 AM
Updated 05/14/2017, 06:45 AM
Main Forecast Changes
Main forecast changes
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