In light of a steady recovery of the US economy, Dukascopy decided to interview Olivier Morand, Professor of Economics at University of Connecticut, who shared his opinion on the present economic situation in the US and its prospects.
For this year we anticipate that GDP growth will shrink from 4.3-4% to 3-3.5%.
The yen fell to a nine-month low against the dollar dropping 0.6 percent to 81.63 per dollar on Friday. Japan's currency also lost 0.3 percent of its value against the EU common currency falling to 108.33 per euro. The yen has weakened 7 percent in the past three months, what makes the Japan's currency the worst performer among 10 key
I doubt whether Eurozone leaders will raise the limit, nor should they in my opinion. There is a risk that bailouts of this kind serve only to delay the inevitable.
LTRO are increasing amount of euros in circulation. There is now over 300 billion more euros in the monetary system. Therefore, the price tends to go down, it is all about supply and demand. Now we have a small pull back, but we would not expect it to persist, because we think that the market would embrace the potential positive
I believe the Eurozone leaders will meet the requirements of G20 and will increase the funding limit. Nevertheless, it will take some time for countries like Mexico, which are willing to contribute to the fund of the IMF. I think, that finally all the G20 countries will raise money necessary for the IMF.
I think for oil the fundamentals are very strong, while inventories and oil spare capacities are very low. If we look at the downside risks which are primarily concerning Greece and the EU sovereign debt that should becoming a bigger financial issue, that is receding very quickly. Whereas, on the other side the geopolitical issue is rising Iran tensions. The
I do not have an optimistic view of any government in the world when the subject is 'Fiscal Responsibility.' Only when a government holds up a Constitution declaring that it cannot spend more than what is taxed in any one year, and lets the private sector manage ALL the welfare problems of that country would I find any optimism.
Currently, the German economy is favourable, as the domestic demand is in a very good position same as consumption, which has increased due to the good situation in German labour market. We predict that the consumer spending will increase by 1 % this year.
I believe that the sanctions imposed on Iran, the EU decision to stop importing crude oil and agreement on the second bailout package for Greece will significantly affect the consumer prices in the EU.
The Portuguese government, being under the auspices and directions of the EC-ECB-IMF, are currently implementing the exact same measures that the Greek government implemented in Greece, under the diktat of the troika.
By the end of the Q1 we forecast the Japanese currency to hit the level of 78
I do not have a particularly excited forecast for the year, I guess it is going to be rather flattish. My official forecast for the USD/JPY is around 80 at the end of Q4.
The Pound has been obviously knocked on the immediate reaction on the Moody's cutting the credit ratings of the troubled Euro zone countries. To be perfectly honest, I do not think the rating agencies tend to have much of an impact on the markets. They do not really reveal to us anything we do not know.
The Australian Dollar has been very strong since the start of the year and it is very much case that we have seen a lot of good news. However, the currency may be under selling pressure over the next month or so, probably in March rather than February.
Undoubtedly, the data on US economy has been recently very good. We are witnessing some upside surprises from data globally, not only in the US. We consider there is a positive momentum that will continue for a bit longer. We have a fairly bullish outlook for the Dollar in the first half of 2012, but in the second half we
Edward WalkChief Economist at MetzlerThe current situation with the European economy? Well, it seems that the troika of inspectors - the IMF, the EU and the ECB are not satisfied with Greece because it did not fulfill their main requirements - austerity and restructuring of bonds. I think that especially Germany has lost patience and there is a high probability that
Currently we have a slightly negative outlook on the Scandinavian currencies due to their apparent economic exposure to the Euro zone debt crisis and the ongoing uncertainty over the resolution of the economic doldrums. We have a below consensus view on the Euro zone and we are anticipating some growth outlook ahead.
Generally we are bullish on the precious metals sector. Our forecast for gold is $1.800 an ounce for the yearly average, potentially it could even hit nearly $2.000 an ounce in the Q4 of 2012. For silver we forecast a price of $35 an ounce as a yearly average. Palladium is anticipated to reach $760, while platinum is expected at
In terms of USD/JPY we have right now a bit of correction lower and going lower basically in the afternoon in Europe. The main sore behind the USD/JPY is that a lot of people have been netting that the Yen would weaken ahead of the new fiscal year in Japan by pressuring the Yen lower and relative to, for example,
Our assumption for gold is that we will see stronger prices in 2012, but there are certain issues in the gold market that are going on right now. We have noticed quite sharp sell-downs for gold at the end of Q3 and at the end of Q4. It means that the prices actually come down quite rapidly in the last
The geopolitical tension between the West and Iran poses a risk to oil prices as the West pushed to discourage Iran's nuclear activity with an embargo on Iran's oil. At the moment it looks like there is a small chance of anything dramatic happening.
We believe there is potential for the Bank of England to implement more Quantitative Easing. The British are likely to increase the asset purchase target to GBP400 billion. We look forward to cable dropping further over the upcoming months.
We are expecting the overall market turmoil to weight on the Ruble in the Q1. Moreover, the Presidential elections in Russia in March this year will also augment the political uncertainty. In our view, during the Q1 of 2012 the Ruble will remain weak, but in general, the outlook for the Russian economy is positive and rather stable.