Another bank abandons 2016 EUR/USD parity call
Deutsche Bank sees EUR/USD finishing the year at 1.05 now vs 1.00 previously
Yesterday BAML threw in the towel on a year end call for euro parity, today's it's Deutsche Bank.
Their view of a stronger US dollar trajectory remains intact and they believe 1.16 is the top end of the euro range. They see the pair turning lower to 1.05 by the end of the year and 0.90 at the end of 2017.
The way these things tend to go is that EUR/USD will collapse down to parity once all the forecasts have been revised to 1.20.
One forecast they nailed is USD/JPY weakness this year. They had a year-end target of 105.00 but with the market nearly there, they've cut that to 101.00. They say the upside in that pair will be capped by hedging of Japanese foreign portfolios.
I would agree with it's unlikely happen for the year end euro/dollar parity.
Goldman Sachs joins the pack abandoning euro-parity call
Third bank in three days to revised euro forecasts higher
Goldman Sachs is out with a note revising its EUR/USD forecasts higher. They had expected the euro to break parity and fall to 0.95 in 2017. They've now revised that to 1.05.
Yesterday Deutsche Bank said it sees EUR/USD finishing the year at 1.05 versus 1.00 previously. Two days ago it was BAML who threw in the towel on a year end call for euro parity.
The forecasts tend to be a great counter-trend indicator. When everyone was revising forecast below parity, that's when the euro bottomed. Now that they're moving the forecasts higher, the bottom will probably fall out of the euro.
Who is going to be the last one out the EURUSD parity door?
The stampede out of currency forecasts is becoming a flood, who might be next
It's been quite funny watching the banks turn throw in the towel on their forecasts. What is surprising is how long it's taken them to do it. So who is left?
I've popped over to our mates at eFX to see who is still playing music while the ship goes down.
EURUSD
- Barclays (as of Mar 22nd) has 1.03 in Dec 2016 and 0.99 in Q1 2017
- Nomura (Apr 6th) 1.00 Dec 2016
- DB 0.9000 Dec 2017
- Scotiabank (May4th) next closest to parity, 1.02 Dec16/Jan17
And what about all those 120/130 calls for USDJPY?
- Commerzbank 120.00 Dec 2016, 128.00 Jun 2017
- SEB 125.00 Q1 2017
- Scotiabank 120 Q1 2017
- UBS 122 Dec 2016, 127 Dec 2017
Let's be fair though, prices can change pretty quickly, just look at the move south in USDJPY this year. Forecasting is often a fools errand but if that's what bank customers want, that's what they'll get. For those with more sensible heads on their shoulders, i.e the ForexLive readership, we know that a price will be what a price will be, at any given time, and all we can trade is what is in front of us.
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Deutsche Bank sees EUR/USD finishing the year at 1.05 now vs 1.00 previously
Yesterday BAML threw in the towel on a year end call for euro parity, today's it's Deutsche Bank.
Their view of a stronger US dollar trajectory remains intact and they believe 1.16 is the top end of the euro range. They see the pair turning lower to 1.05 by the end of the year and 0.90 at the end of 2017.
The way these things tend to go is that EUR/USD will collapse down to parity once all the forecasts have been revised to 1.20.
One forecast they nailed is USD/JPY weakness this year. They had a year-end target of 105.00 but with the market nearly there, they've cut that to 101.00. They say the upside in that pair will be capped by hedging of Japanese foreign portfolios.
source