Bank of America (BofA) published its currency market forecast, predicting that the EUR-USD rate will reach 1.12 by the end of the year. The bank’s analysts expect most of the euro’s appreciation to occur in the second half of the year, placing their forecast above the consensus estimate of 1.08 for 2024.
In addition to the euro, BofA’s analysis continues to focus on G4 currencies. The currency pair is currently trading close to the bank’s year-end forecast for 2024. However, BofA noted that there is still a risk of intervention in the currency pair.
The British pound (GBP) is also in BofA’s sights, with the bank maintaining a constructive stance on the currency. This optimism is confirmed by stronger than expected data on the Consumer Price Index (CPI) in the UK. Nevertheless, BofA acknowledges that the upcoming UK general election is likely to dominate market attention in the compact term.
BofA’s broader view on currency markets includes a forecast of gradual depreciation of the US dollar across most G10 currencies this year and next.
The forecast also suggests a slightly greater depreciation of the US dollar relative to G10 currencies with higher beta.
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