Australian Dollar Forecasts Vs UK Pound, NZ Dollar And Euro: CPI, ECB Speculation & Chinese Data

This is source I found from another site, main source you can find in last paragraph

The Euro US Dollar (EUR USD) exchange rate struck a new three-year high this morning as investors become increasingly dovish towards the US currency.

US Dollar (USD) Weakens as Outlook Looks Gloomy

The US Dollar continues to have a rough go of it in 2018 as the currency retreated even further this morning as investors assess the US currency’s future.

In regards to the short-term outlook for the US Dollar, economists are forecasting further losses as investors appear less and less interested in the Federal Reserve’s monetary policy plans for the coming year.

Other major central banks have recently caught up with the Fed when it comes to monetary tightening, with the Bank of England (BoE) and Bank of Canada (BoC) both raising interest rates in recent months.

This has stolen some of the spotlight from the Fed as it is no longer the only gang in town when it comes to rate hikes, limiting the appeal of the US Dollar.

Richard Hunter, head of markets at Interactive Investor said: ‘The likelihood of monetary tightening from other developed economies has resulted in further US dollar weakness, an early investment theme for the new year.’

Meanwhile some analysts suggest that the possible long-term decline in the US Dollar is likely down to Trump’s ‘America first’ attitude to policy, and his desire to make the US more competitive by undermining the strength of the currency.

Observers also suggest his move towards deglobalisation in the also possibly removing the US Dollar from its role as main peg in global markets.

Steven Barrow, head of G-10 strategy at Standard Bank, said in a note to clients; ‘We believe that the ‘America first’ policy and the drive to make the US more competitive against other major trading partners is consistent with, at best, benign neglect of the dollar and, at worst, a clear desire for dollar weakness.’

Upbeat 2018 Expectations Bolster Euro (EUR)

Meanwhile the Euro is climbing today as the souring of the US Dollar prompts many investors to rebalance their portfolio’s, with the stunning growth delivered by the Eurozone in 2018 making it an appealing prospect to many investors who are looking to short USD.

In fact many investors are confident that the recent performance of the Eurozone will be replicated in 2018, possibly helping the global recovery to outpace US growth in the coming year.

On top of this the appeal of the Euro has been bolstered by increased speculation that the European Central Bank (ECB) could be moving towards tightening its monetary policy to a great extent in 2018.

While the ECB is currency scheduled to begin tapering its stimulus programme over the coming months, some analysts are suggesting that the bank may seek to speed up this process in order to limit any chaos later down the road.

Finally the possibility of Germany’s political deadlock being broken in the near-future is also bolstering the Euro.

Investors are hopeful that a new ‘grand coalition’ will help to shore up the political landscape in the bloc, although some uncertainty regarding the Italian elections are likely to remain.

EUR USD Forecast: Germany Inflation to Slide as Expected?

Looking ahead the EUR USD exchange rate may slip tomorrow with the release of Germany’s final CPI reading for December, with economist forecasting that it will confirm that inflation tumbled from 1.8% to 1.7%.

Meanwhile the US Dollar may struggle to take advantage of any weakness in the Euro if the Empire State manufacturing index shows that factory activity across New York State slowed in January.

This is source I found from another site, main source you can find in last paragraph

Source : https://www.exchangerates.org.uk/news/20229/eur-usd-exchange-rate-news-updates-and-currency-forecasts.html

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