![]() Given these fundamentals, the bank expects the Canadian dollar will lose ground.Īccording to Danske, the Swedish krona can recover from over-sold levels, but it considers that fundamentals remain weak. It notes “We pencil in a return of broad-based USD strength and we believe the relative growth outlook between the US and Canada favours a higher cross.”ĭanske is also still concerned over risks associated with high Canadian debt levels which could force a policy reversal. It notes “as the global growth momentum looks to ease towards fall, we doubt the support from relative rates and terms-of-trade will persist far, and stick to a downward-sloping forecast profile.”ĭanske expects that the Canadian economy will struggle to match the US performance. Nevertheless, the bank is still wary over the underlying Australian dollar outlook. It adds “Overall, we think the USD/JPY seems fundamentally overvalued and combined with potential monetary policy tightening we expect the cross to drop below 130 on a 6-12M horizon.”ĭanske expects that the Chinese yuan will lose further ground as the central bank continues to cut interest rates.ĭanske expects that a dip in yield expectations will undermine the currency.Īs far as the Euro to Pound (EUR/GBP) exchange rate is concerned it adds “We thus expect the cross to move back towards 0.87- 0.88 over the coming 12 months.”ĭanske notes that the Reserve Bank of Australia has been more hawkish than expected and commodity prices have also strengthened on hopes for Chinese stimulus. It expects an adjustment in yield curve control in July or September which will allow yields to increase.Ī policy shift and higher yields would help underpin the Japanese currency. ![]() Risks to this assumption primarily lie in the combination of a sharp drop in core inflation and a more resilient global economy than what we pencil in.”Ībove: Table of currency forecasts from Danske Bank covering period 2023-2024.ĭanske Bank considers that the Bank of Japan is underestimating domestic inflationary pressures and the underlying pressure of underlying inflation will increase pressure on the central bank to tighten policy. It notes “A key assumption is that of a re-tightening of global financial conditions. ![]() The bank also notes that any increase in energy prices would tend to hamper the Euro.ĭanske outlines the circumstances in which the dollar could be more vulnerable. In this context it adds “We maintain our strategic case for a lower EUR/USD based on relative terms of trade, real rates and relative unit labour costs.” It also expects financial conditions will tighten. It notes “Overall, we think the US economy will prove more robust relative to the European counterpart in H2.” It adds “we see the prospect of the USD finding further near-term support despite the Fed pause.”ĭanske expects that the US economy overall will out-perform which will support the currency. Short-term yield spreads will, therefore, tend to move in favour of the Euro over the next few months.ĭespite the narrowing of yield spreads, Danske expects that the dollar will strengthen against the Euro. In contrast, the bank expects that the ECB will increase interest rates again in July and September which would take the refi rate to 4.50%. Weak fundamentals will tend to keep the Swedish krona on the defensive.Īs far as interest rates are concerned, Danske expects that Federal Reserve will decide against raising interest rates further and will hold rates at 5.25% over the remainder of 2023.Commodity currencies to drift weaker as global financial conditions remain tight.GBP/USD will retreat to below 1.20 in 12 months as BoE expectations are repriced.USD/JPY is forecast to slide to 127 in 12 months as the BoJ tightens policy as US yields dips.EUR/USD is forecast to weaken to 1.06 on a 6-month view and 1.03 in 12 months.Danske still expects dollar support from US out-performance and tight financial conditions.Yield Spreads will move against the dollar as the Fed decides against further rate hikes. ![]() 2023-2024 exchange rate forecasts from Danske Bank - update June 2023.Last updated: Jat 12:05 AM CET Most popular currency exchange rate conversion pairs Top currency exchange rates at Convertworld General information about JMD To CAD Conversion category: The Canadian dollar is the monetary basis for the Canadian economy, with all coins manufactured by the Royal Canadian Mint and all bills manufactured by the Canadian Bank Note Company. It is normally abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies. The dollar (currency code CAD) has been the currency of Canada since 1858. ![]()
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