© Richard Franulovich
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The U.S. Dollar has advanced against most of its major counterparts this year. In your opinion, do you think that this trend will continue?
I do expect this trend to continue. I believe that the U.S growth picture is much more secure than most of us think. Moreover, I see the U.S economy standing on a more stable footing and most importantly it seems to me that it has a more secure outlook than Europe. Further, the Fed policy biases are under debate as currently it is focused on either maintaining asset purchases or slowing them down. At the same time, the ECB debate is whether to leave rates on hold or cut them even further. Therefore, ultimately the policy biases of the Fed are ones that might become progressively less accommodative than the ECB ones. That means that in the long run interest rates in the U.S should rise versus European ones and that should help to secure firmer times for the U.S Dollar for the rest of the year.What drivers will have a significant impact on the greenback in a long and in a short term?
In the short run, the single and the most important statistic to watch would be the U.S job numbers, as that dictates whether the Fed continues their asset purchases or not. If we get a string of at least 200k, or ideally even stronger numbers, the payroll prints rising for several months would point out to the chance that the Fed slows down their asset purchases. Thus, as that would have a positive impact on the Dollar I would keep a close eye on the payrolls.
What is your forecast for EUR/USD for the end of this month and for the end of the year?
In my opinion, EUR/USD could be trading at 1.30 by the end of the month, while we are forecasting the pair to enter the 1.26-1.27 by the end of the year.