© Brett Ryan
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We expect one rate hike from the Federal Reserve this year in December and two more next year, the first in June and the second in December of the next year. In fact, it was not the non-farm payrolls data that disappointed, it was the income data that disappointed most in the report. The problem was that the hours and wages were weak; so, from the full income perspective, income growth is slowing.
EU talks with the US over the so-called Transatlantic Trade and Investment Partnership, also known as TTIP, have failed, Economy Minister Sigmar Gabriel said recently. In your point of view, how likely is the EU-US dialogue is to be resumed?
I think, after the election that would be done. You know, TTIP it is really not a huge game changer in terms of GDP, and it really expands upon existing trade agreements. Furthermore, it does not include China; so, it is more about other areas of trade. Nevertheless, I suppose that once the US election is over TTIP will probably be renewed, talks will continue after the new administration.
What factors will influence the performance of the Greenback through the rest of the year? What performance do you expect to see from it? What are your forecasts for USD/CAD and USD/JPY for the same period?
In general, we expect a modest appreciation of the US Dollar. I would say that the Greenback is likely to appreciate against the Canadian Dollar. I look at the Canadian economy as well; so, from what we have seen lately from the Canadian central bank, the Bank of Canada needs to keep the Loonie low and that is what we expect them to do. As to the Japanese Yen, it seems like it is going in another way these days. However, I can see the US Dollar flattening against the Japanese Yen over the next year. I can see it flat, I can see it up 5%, as well as I can see it down 5%.